BalajiGalvanising Industries Limited.
Report on the financial statements
We have audited the accompanying financial statements of BalajiGalvanisingindustries Limited ("the Company") which comprise theBalance Sheet as at March 31 2017. and the Statement of Profit and Loss and the Cash FlowStatement for the year then ended and a summary of significant accounting policies andother explanatory information.
Management's 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 fcules 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 perforin 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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 the
* \ appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation 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.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manne#>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 2017 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 ("the Order")issued by the Central Government of India in terms of section (11) of section 143 of theAct and in terms of the information and explanation sought by us and given by theCompanyand the books and records examined by us in the normal course of audit and to thebest of our knowledge and belief we state that:
i. a)The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification. Hencethe question of dealing with such discrepancies in the books of account does not arise.
(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.
ii. (a) As explained to us inventories have been physically verified during the yearby the
management at reasonable intervals no material discrepancies were noticedduring the
course of physical verification of the inventories.
iii. The company has not granted any loans or advances in the nature of loans to
parties covered in the register maintained under section 189 of the Act. Thus
paragraph 3(iii) of the order is not applicable.
iv. In our opinion the provisions of sec 185 and sec 186 of the Companies Act 2013are not applicable. Thus the paragraph 3(iv) of the order is not applicable.
v. According to the information and explanations given to us the company has notaccepted any deposits within the meaning of Sections 73 to 76 of Companies Act' 2013.
vi. The Central Government has prescribed the maintenance of cost records u/s:\ 148(1)of the Act for the manufacturing of Steel products but the Company has not exceeded thelimits which have been specified by the Central Government for the maintenance of the costrecords. Thus paragraph 3(vi) df the order is not applicable.
vii. (a) According to the information and explanations given to us and on the basis ofour examination ot the records ot the Company amounts deducted/accrued in the books ofaccount in respect ot undisputed statutory dues including provident fund income-taxsales tax value added tax service tax. cess and other material statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us no undisputed statutory duespayable in respect of provident fund income tax sales tax. value added tax duty ofcustoms service tax cess and other material statutory dues were in arrears as at 31s1March 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us. there are no materialdues ot income tax duty of customs service tax value added tax which have not beendeposited with the appropriate authorities on account of any dispute. However according tothe information and explanations given to us the duty of excise has not been deposited bythe Company on account of dispute:
|Name of the Statute ||Nature |
|Period to which the dispute related ||Forum where dispute is pending ||Amount |
|Central Excise Act 1944 ||Excise |
|2012-13 ||Commissioner of Central Excise (Appeals) ||1795647 |
viii. The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe order is not applicable.
ix. The Company did not raise any money from the initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3(ix) of the order is not applicable.
x. According to the information and explanations given to us no material fraudby the
Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit.
xi. According to the information and explanations given to us and based on theexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions of thesec: 197 read with schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us the
Company is not a nidhi Company. Accordingly paragraph 3(xii) of the order is notapplicable. ip
xiii. According to the information and explanations given to us and based on ourexamination ol the records of the Company the Company has not entered into anytransaction with the related parties during the year. Accordingly paragraph 3(xiii) of theorder is not applicable.
xiv. According to the information and explanations given to us and based on ourexamination ol the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv. 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 any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order is not applicable.
xvi. The Company is not required to be registered under section 45IA of the ReserveBank of i
India Act. 1934.
Z- As required by Section 143(3) of the Act we report that
i. 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;
ii. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
iii. 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;
iv. 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;
v. On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31.2017 from being appointed as a director in terms of Section 164(2) theAct.
\i. 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 A"
vu. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule I 1 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:
a) The Company does not have any pending litigations which would ii#pact its financialposition.
b) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
d) The Company has provided requisite disclosures in the financial statements as loholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December. 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with looks of accountmaintained by the Company and as produced to us by the Management.
Place: Secunderabad Date: 29.05.2017
Aiiiiexure A to the Auditor's Report
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 BalajiGalvanising Industries Limited ("the Company') as of March 3L 2017 in conjunctionwith our audit of the financial statements of the 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 ol Internal Financial Controls Over Financial Reporting("Guidance Note") issued by the Institute ot Chartered Accountants of India.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 company's 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 Act.
Auditors' Responsibility i
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(Guidance Note') and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act
2013 to the extent applicable to an audit of internal financial controls bothapplicable 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 wereestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy otthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit ot internal financial controls over financial reporting includedobtaining an understanding ot 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 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 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 financiastatements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and piocoduics that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and iairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance that 4 transactionsare recorded as necessary' to permit preparation of financial statements in tucoid.imewith generally accepted accounting principles and that receipts and expenditures ol thecompany arc being made only in accordance with authorizations of management and directorsol the company; and t -\) provide reasonable assurance regarding prevention or timelydetection ol unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on^lhe financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting inciuda . the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections ol any evaluation ol 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.
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 b. the Institute of Charteredaccountants of India.