To The Members Shree Ganesh Forgings Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Shree Ganesh ForgingsLimited ("the Company") which comprise the Balance Sheet as at 31st March2015 the Statement of Profit and Loss and Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.
Managements Responsibility for the 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 financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
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 judgement 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 qualified audit opinion on the financial statements.
Basis for Qualified Opinion
a) The company has defaulted in payment of statutory dues such as Sales tax PropertyTax TDS NMMC Cess and for TCS TDS Service Tax P.T. the company has not filled anyreturn during the year.
b) The Company has accumulated losses at the end of fiscal which is more than its networth. Despite accumulated losses and consequent erosion of equity and inadequateliquidity accounts have been complied as on going concern basis.
c) The Company has also defaulted in repayment of loans and interest borrowed frombanks and financial institutions.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph on the Profit and Reserves and Surplus for the year the aforesaidfinancial statements give the information required by the Act in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India.
(a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2015
(b) In the case of Statement of Profit and Loss of the Loss for the year ended on thatdate.
(c) In the case of Cash Flow Statement of the cash flows for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
As required by 'The Companies (Auditors' report) Order 2015' issued by the CentralGovernment of India in terms of Section 143(11) of the Act (hereinafter referred to as the"Order") and on the basis of such checks of the books and records of the Companyas we considered appropriate and according to the information and explanations given tous we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 ofthe Order
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 and the Statement of Profit and Loss dealt with by this Reportare 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 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2015 from being appointed as a director in terms of Section164 (2) of the Act.
(f) 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 as at March 31 2015 onits financial position in its financial statements.
(i) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any and as required on long-term contractsincluding derivative contracts.
| ||For BATLIBOI & PUROHIT |
| ||Chartered Accountants |
| ||Firm Reg. No. 101048W |
| ||(Raman Hangekar) |
|Place: ||Partner |
|Mumbai || |
|Date || |
|Membership No: 30615 || |
ANNEXURE TO INDEPENDENT AUDITORS REPORT
With reference to the annexure referred in the Auditors' Report to the members of ShreeGanesh Forgings Limited ('the Company') on the financial statements for the year ended onMarch 31 2015 we report that:
i) a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us the fixed assets are being physically verified by themanagement at reasonable intervals under a phased programme of verification. No materialdiscrepancies have been noticed on such verification.
ii) (a) Inventories have been physically verified during the year by management atreasonable intervals.
(b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
(c) The company is maintaining proper records of inventory and no materialdiscrepancies were noticed on physical verification.
iii) During the year the company has granted an unsecured loan to 3 Parties amountingto '3.988 Crores covered in the register maintained under section 189 of the Act.
(a) The party has not fully repaid the principal amount and no interest was charged onthese loans
(b) The company has taken reasonable steps to recover the amount more than Rupees OneLakh & hence this clause is applicable.
iv) In our opinion and according to the explanations given to us there are adequateinternal control systems commensurate with the size of the company and the nature of itsbusiness for the purchase of inventory and fixed assets and for the sale of goods andservices. We have not observed any major weakness in the internal control system duringthe course of our audit but the same needs to be further strengthened.
v) The Company has not accepted any deposits and hence the directives issued by theReserve Bank of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act and the rules framed thereunder are not applicable to theCompany.
vi) The Company is not specified by the Central Government under sub-section (1) ofsection 148 of the Companies Act for the maintenance of cost records and therefore thisclause is not applicable.
vii) a) According to the information and explanations given to us and on the basis ofexamination of the records of the company the Company has not made any deductions underthe provident fund employees' state insurance. In our opinion the company is generallyirregular in depositing undisputed statutory dues including income-tax sales-tax servicetax value added tax and any other material statutory dues with the appropriateauthorities and there are outstanding unpaid amounts payable as on last day of thefinancial year for a period of more than six months from the date they became payable.
In respect of Statutory Dues:
According to the information given to us there were certain dues in respect of IncomeTax & Cess are outstanding as at March 31st2015 for a period of more than six monthsfrom the date they become payable due to financial constraints faced by the company.Details are as follows:
|NMMC Cess ||1050184 |
|Sales Tax ||4520216.51 |
|Property Tax ||12539735 |
|P.T ||78146 |
|CST ||156286 |
The disputed statutory dues relating to sales Tax and misc. aggregating to Rs270.68lakhs that have not been deposited for which Company has made Appeal to the AppellateAuthority as under :
|Assessment Year ||Amount (Rs.) |
|2000-01 ||9450.00 |
|2001-02 ||350003.00 |
|2002-03 ||3043843.00 |
|2003-04 ||2216678.00 |
|2004-05 ||1331956.00 |
|2005-06 ||1331956.00 |
|2006-07 ||21115850.00 |
As on 31.03.2010 the company had accumulated losses of Rs.357639510/- whichcompletely eroded company's net worth. The company was registered as sick company Underthe provisions of Sick Industrial and Companies (special provisions) Act 1985 with theboard for Industrial and Financial Reconstruction (BIFR) on 3rd August 2010. As on 31stMarch 2015 the Company's net worth remains eroded by its accumulated losses ofRs.822966189/- During the financial year 2014-15 the company had incurred cash lossesof Rs.28204473/- and Rs.NIL in the immediately preceding Financial year.
According to the information and explanations given to us and on the basis ofexamination of the records of the Company the particulars of the dues in respect ofIncome tax and Sales tax which have not been deposited on account of dispute are asfollows.
viii) The company has accumulated losses at the end of the financial year and hasincurred cash losses in the immediately preceding financial year.
ix) On the basis of our examination and according to the information and explanationgiven to us the company has defaulted in repayment of dues to a financial institution orbank.
x) According to the information and explanations given to us the company has not givenany guarantee for loans taken by others from bank or financial institutions and thereforethe said clause is not applicable.
xi) In our opinion and according to the information and explanations obtained from themanagement term loans were applied on an overall basis for the purpose for which theloans were obtained.
xii) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud on or by the Company noticed or reported during the year norhave we been informed of any such cases by the Management.
| ||For BATLIBOI & PUROHIT |
| ||Chartered Accountants |
| ||Firm Reg. No. 101048W |
| ||(Raman Hangekar) |
|Place: Mumbai ||Partner |
|Date ||Membership No: 30615 |