TO THE MEMBERS OF
ADITYA FORGE LIMITED
Report on the Indian Accounting Standard (Ind As) Financial Statements
We have audited the accompanying Ind AS financial statements of ADITYA FORGE LIMITED(the Company) which comprise the Balance Sheet as at March 31 2018; thestatement of profit and loss (including other comprehensive income) the cash flowsstatement and the statement of changes in equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information (herein afterreferred to as "Ind AS financial statements").
Managements Responsibility for the Ind AS Financial Statement
The Companys 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with relevant rules issued there under
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS Financial Statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the Ind AS financial statementsare free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe Ind AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompanys preparation of the Ind AS financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Companys Directors as wellas evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the State ofaffairs (financial position) of the Company as at March 31 2018; its Profit (financialperformance including other
comprehensive income) its Cash Flows and changes in equity for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
1. As required by The Companies (Auditors report) Order 2016 ("theorder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure-A" a statement onthematters specified in 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.
d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with relevant rulesissued thereunder;
e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the internal financial control over financialreporting of the Company and operating effectiveness of such controls refer to ourseparate Report in "Annexure-B."
g) With respect to the other matters to be included in the Auditors 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 its Ind AS financial statements - Refer Note No. 17 to the Ind AS financialstatements.
ii. The Company did not have any long-term contracts including derivative contractsfor which there Were any 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 K J Shah & Co. ||Kamlesh J Shah |
|Chartered Accountants ||(Proprietor) |
|Firm Reg. No. 132369W ||Membership No.42390 |
|Place: Vadodara || |
|Date: 31st May 2018 || |
"ANNEXURE - A" TO THE INDEPENDENT AUDITORS REPORT
CARO 2016 Report on the financial staten^qt of ADITYA FORGE LIMITED for the year endedMarch 31 2018.
(Referred to in paragraph 1 under Report on Other Legal and Regulatory
Requirements section of our report of even date)
To the Member of Aditya Forge Limited
On the basis of records produced to us for our verification/ examination as we
considered appropriate and in terms of information and explanations given to us
for our enquiries we state that;
i. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets on the basis of availableinformation.
b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the company and nature of its assets. As informed to us no materialdiscrepancies were noticed on such physical verification.
c) As explained to us no substantial part of fixed assets has been disposed off (exceptsome part of plant which was non- functioning and as explained was not hypothecated withany FI/Bank) during the year and it has not affected the going concern.
d) 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.
ii. In respect of its inventories:
a) The inventories have been physically verified at regular reasonable intervals duringthe year by the management.
b) In our opinion and according to the information and explanation given to us theprocedures of physical verification of inventories followed by the management areadequate.
c) The company has maintained proper records of inventories. As per the information andexplanation given to us no material discrepancies were noticed on physical verification.
iii. In respect of the loans secured or unsecured granted by the company tocompanies firms or other parties covered in the register maintained under Section 189 ofthe Companies Act 2013. ' :
a) The Company has not granted loan to; firms and other parties covered inthe register maintained under section 189 of the Companies Act 2013. Hence no reportingis given on this clause.
b) The Company has taken loan under the section 189 of companies act 2013 8s itsrepayable on demand.
c) According to the information and explanations given to us all other terms andconditions for such loans are not prima facie prejudicial to the interest of the company.
iv. In respect of internal control.
In our opinion and according to the information and explanation given to us theCompany has an adequate internal control system commensurate with its size and the natureof its business for the purchase of inventory and fixed assets and for the sale of goodsand services. During the course of our audit we have not observed any continuing failureto correct major weaknesses in such internal control system.
v. In respect of deposits from public
The Company has not accepted any deposit within the meaning of Section 73 to 76 of theCompanies Act 2013 and the rules framed there under.
vi. In respect of maintenance of cost records
We have broadly reviewed the books of account maintained by the Company pursuant to therules made by the Central Government for Maintenance of cost records under section 148(1)of the Act in respect of Companys product to which the said rules are madeapplicable and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have however not made a detailed examination of therecords with a view to determine whether they are accurate.
vii. In respect of statutory dues:
a) According to the records of the Company undisputed statutory dues includingEmployees State Insurance Sales Tax Wealth Tax Duty of Customs Duty of ExciseValue Added Tax Cess and other statutory dues have been deposited with appropriateauthorities subject to following note as per clause 7 (b).
b) According to the information and explanation given to us following amounts payablein respect of the aforesaid dues were outstanding as at March 31 2018 for a period morethan six months from the date of becoming payable.
|Particulars ||Amount |
| ||(Rs.) |
|Tax Deducted at Source ||1167819 |
|Service Tax ||306708/- |
|Provident Fund of Employees 8s Employer ||231144 |
|Professional Tax of employee ||550070 |
There were disputed statutory dues of the company that have not been deposited onaccount of matters pending before appropriate authorities. The same are as below;
|Sr. No. || |
Name of the Statue
Nature of the Due
Period to which the amount relates
Forum where dispute is pending
|1 || |
Tax & Interest
|The appeal was decided in favor. Against the same the revenue has preferred an appeal before Income Tax Appellate Tribunal Ahmadabad Benches. |
|2 || |
Tax & Interest
|Commissioner of Income Tax Appeal Baroda |
|3 || |
|Appeal pending for appellate Authority |
|4 || |
Tax & Interest
F.Y 2012- 13 2013- 14 2014- 15
|Commissioner of Income Tax Appeal Baroda |
viii. In respect of dues to financial institution /banks/debentures
Madhavpura Mercantile Co-op Bank Limited(MMCB) is under Liquidation as the result ofwhich the company is not able to do banking transaction with it. The bank has filed a caseagainst the company in the Court of Board of Nominees. The company has provided forInterest of Rs.19211140 to arrive at the figure for which case is filed by the Bankwith the Court of Board of Nominees as per the Notice No. MMCB/HO/44/229/2011-12 dated 4thJanuary 2012 issued to the company by MMCB. Interest from the date of decree on theoutstanding amount of the suit is yet to be charged to the Profit and loss account. TheCompany had shown their willingness to settle the account as per OTS offered to them bythe Bank (MMCB) vide their letter No. MMCB/SHB/43/10/11 Dated10/06/2010. The request ofCompany is pending. In the meanwhile the MMCB has offered new OTS Scheme. The Company hasshown their willingness subject to arriving at OTS amount which was offered to the Companyvide their Letter dated 10th June 2010 for an amount of Rs. 4.76crores. Thenecessary discussion between the Company and MMCB is under way.
The company has also filed a counter claim of Rs. 121619311/- on account of suddenclosure of Banks Branch at Vadodara excessive charging/ recovering of interest fromworking capital facilities forcing the company to face financial crunch resulting intoloss of Export orders etc which is also pending before the Hon Civil Court at Vadodara
ix. In respect of application of Term loans.
a. The company has not raised any money by way of initial public offer or furtherpublic offer (including debt Instruments) during the year. Hence reporting on utilizationof such money does not arise.
b. The term loans raised during the year have been utilized for the purpose for whichthey were obtained. The term loans outstanding at the beginning of the year were appliedfor the purposes for which they were raised.
x. In respect of Fraud
During the course of our examination of the books and records of the company carriedout in accordance with the generally accepted auditing practices in India and accordingto the information and explanation given to us we have neither come across any instanceof material fraud on or by the Company noticed or reported during the year nor have webeen informed of any such case by the Management.
xi. In respect of Managerial Remuneration.
In our opinion and according to the information and explanations given to usmanagerial remuneration has been provided & paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct2013 (including approval by the Central Government).
xii. In respect of Nidhi Companies
In our opinion and according to information and explanations given to us the Company isnot Chit fund or a Nidhi or Mutual benefit fund/society. Therefore paragraph 3 (xii) ofthe Order is not applicable to the Company.
xiii. In respect of Related Parties Transactions
a) In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with sections 177 and 188 of theCompanies Act 2013.
b) The details of transactions during the year have been disclosed in the Ind ASFinancial Statements as required by the applicable accounting standards.
xiv. In respect of Preferential allotment/ Private placement
During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Therefore paragraph 3 (xiv) of the Order is not applicable to the Company.
xv. In respect of Non-Cash Transactions with Directors
According to the information and explanation given to us by the management the Companyhas not entered into any non-cash transactions with the directors or persons connectedwith them as referred to in section 192 of the Act.
xvi. In respect of Registration with RBI
According to the information and explanation given to us the Company is not requiredto be registered under section 45-IA of the Reserve Bank of India Act 1934.
|Place: Vadodara ||For K J Shah & Co. |
|Date: 31st May 2018 ||Chartered Accountants |
| ||FirmjRegv No. 132369W |
|KamKshkJ Shah || |
|(Proprietor) || |
|Membership No.42390 || |
"ANNEXURE - B" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2(f) under Report on Other Legal and RegulatoryRequirements section of our report of even date)
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 "ADITYAFORGE LIMITED" as of March 31 2018 in conjunction with our audit of the Ind ASfinancial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act2013.
Our responsibility is to express an opinion on the Companys 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 and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained 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 auditors judgment 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 are sufficient and'appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of Ind AS financial statements for external purpose in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that;
I. Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
II. Provide reasonable assurance that transactions are recorded as necessary
to 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 '
III. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the companys assets that could havea 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 the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
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 31 March 2018 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 K J Shah & Co. ||/ Kamlesh J Shah |
|Chartered Accountants ||(Proprietor) |
|FirrA ReSxNo. 132369W ||Membership No.42390 |
|Place: Vadodara || |
|Date: 31st May 2018 || |