We have audited the standalone financial statements of Baroda Extrusion Limited("the Company") which comprise the balance sheet as at 31stMarch 2019 and thestatement ofProfit and Loss and statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.
Attention is invited to the following
1. Issue of Takeover Notice by SICOM LIMITED under section 29 of State FinancialCorporation Act 1951 to the company for recovery of its dues The "GoingConcern" status of the Company is not affected as physical possession of the assetshave not been taken.
2. The management of the Company has not made an application to NCLT under TheInsolvency and Bankruptcy Code 2016 (IBC) though the net worth of the Company is erodedfully as on balance sheet date.
3. Non-provision of doubtful debts amounting to Rs. 20 41 57589/- and to that extentthe loss for the year is understated.
4. Non-compliance of AS-15 with regard to Accounting of Retirement Benefits exceptProvident Fund. The exact amount in respect of these benefits is not provided in theaccounts as no actuarial valuation in respect of these benefits is made by the Company
5. Balances of Secured Loans as at 31.03.2019 are subject to their confirmation andreconciliation.
6. Balances of sundry debtors sundry creditors and advances as at 31.03.2019 aresubject to their confirmation and reconciliation.
Subject to the above in our opinion and to the best of our information and accordingto the explanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 and its profit and its cashflows for the year ended on that date.
Basis for Opinion
We conducted our audit of standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company inaccordance with the Code of Ethics issued by the Institute ofChartered Accountants of India together with the ethical requirements that are relevant toour audit of the financial statements under the provisions of the Companies Act 2013 andthe Rules there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended 31st March 2019. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.
|Sr. No. ||Key Audit Matter ||Auditors' Response |
|1 ||Accuracy of recognition presentation and disclosures of Revenues in view of adoption of Ind AS 115 ||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standards. |
| ||The application of the new revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. ||Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing of samples by selecting samples of invoices and vouchers for a variety of revenues and capital expenditure for the purpose of revenue reorganization appropriateness of the transaction price and their basis over a period. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis
Board's Report including Annexure to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the standalonefinancial statements and out auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materiallymisstated.If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company 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.
In preparing the financial statements the Board of Directors is responsible forassessing the
Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless the Boardof Directors either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal controls.
Obtain an undertaking of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentations.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
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 sub-section (11) of section 143 of theCompanies Act 2013 we give in the Annexure A statement on the matters specified inparagraphs 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch 2019 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 toourseparate Report in "Annexure B".
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 does not have any pending litigations which would impact its financialposition except those in Note 21.
ii. The Company did not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does not arise
iii. There has not been an occasion in case of the Company during the year under reportto transfer any sums to the Investor Education and Protection Fund. The question of delayin transferring such sums does not arise.
| ||For Parikh Shah Chotalia & Associates |
| ||Chartered Accountants |
| ||FRN: 118493W |
|Place: Vadodara ||CA Dhirendra P Shah |
|Date: 30th May 2019 ||(Partner) |
| ||Membership No: 030464 |
Annexure A to Independent Auditor's Report
Referred to in our Report of even date to the members of Baroda Extrusion Limited onthe financial statements of the company for the year ended 31st March 2019.
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:
i) In respect of the Company's fixed assets:
(a) The Company is still in the process of updating its records of fixed assetsincluding quantitative details and situation of it's fixed assets.
(b) The physical verification of fixed assets have not been conducted during the yearby the management and in view of the same material discrepancy if any have not beenascertained.
(c) According to the information and explanations given to us by the managementimmovable properties are held in the name of the Company The title deeds of immovableproperties have not been produced for our verification.
ii) The physical verification of inventory has been conducted by the Management at yearend and as informed to us no material discrepancies have been noticed on such physicalverification as compared to book records. However the frequency of verification needs tobe increased.
iii) The Company has not granted any loans secured or unsecured loans to companiesfirms Limited Liability Partnership or other parties covered in the register maintainedunder Section 189 of the Act.
iv) In our opinion and according to the information and explanations given to us theCompany has not given any loans made any investment or given guarantees which are coveredby the provisions of Section 185 and 186 of the Act.
v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits and hence directives issued by the Reserve Bank ofIndia provisions of Sections 73 to 76 of the Act and the Rules framed there under are notapplicable to the Company.
vi) As informed to us the Central Government has not specified maintenance of costrecords under Sub section (1) of Section 148 of the Act.
vii) (a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Income TaxValue Added Tax Service Tax Goods and Service Tax etc have been generally deposited bythe Company during the year with the appropriate authorities. According to the informationand explanations given to us no undisputed amounts payable in respect of statutory dueswere in arrears as at 31st March 2019 for a period of more than six months from the datethey become payable.
viii) According to the information and explanations given to us and records of theCompany examined by us there are no dues of Income Tax Service Tax Sales Tax ValueAdded Tax Goods and Service tax etc. which have not been deposited on account of anydispute.
ix) According to the records of the Company examined by us and the information andexplanation given to us the Company has defaulted in repayment of its dues to SICOM Ltd.as at Balance Sheet date to the extent of Rs. 458705234/- (exclusive of non provisionof interest for the year 2014-15 2015-16 2016-17 2017-18 and 2018-19) The Company hasdefaulted in repayment of its dues to SICOM Ltd since last six years.
x) According to the information and explanations given to us the Company did not raiseany money by way of initial public offer and also by way of term loan during the year.
xi) Based on our audit procedures performed for the purpose of reporting the true andfair view of the Ind As financial statements and on the basis of information andexplanations given by the management no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
xii) The managerial remuneration has been paid / provided in accordance with theprovisions of Section 197 read with Schedule V to the Act.
xiii) The provisions of Clause 3(xii) of the Order are not applicable to the Company asthe Company is not a Nidhi Company.
xiv) The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS) 18 related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014. ( Refer Note No.39)
xiv) According to the information and explanations given to us and based on ourexamination of 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 under review.
Accordingly the provisions of Clause (xiv) of the Companies Auditor's Report Order2016 are not applicable to the Company.
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 noncashtransactions with its Directors or persons connected with him.
xvi) The provisions of Clause 3(xvi) of the Order are not applicable to the Company asit is not required to be registered under Section 45-IA of the Reserve Bank of India Act1934
| ||For Parikh Shah Chotalia & Associates |
|Place: Vadodara ||Chartered Accountants |
|Date: 30th May 2019 ||FRN: 118493W |
| ||CA Dhirendra P Shah |
| ||(Partner) |
| ||Membership No: 030464 |
Annexure B to Independent Auditor's Report
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-Section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the Internal Financial Controls over the financial reporting of BarodaExtrusion Ltd. ("the Company") as of 31st March 2019 in conjunctionwith our audit of the Ind AS financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial controls
The respective Board of Directors of the Company are responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in 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 andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") issued by ICAI and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls bothapplicable to an audit of internal financial controls. Those Standards and the GuidanceNotes require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control systems 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 auditor's judgment including the assessment of the risk of materialmisstatement 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 of the Company.
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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
pertain to maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
provide reasonable assurance that transactions are recorded as necessary topermit 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
provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper managements 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 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 to the best of our information and according to the explanations givento us the Company has an inadequate internal financial controls system over financialreporting and in view of this we are unable to express our opinion whether such internalfinancial controls over financial reporting were operating effectively or not as at 31stMarch 2019 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe ICAI.
| ||For Parikh Shah Chotalia & Associates |
| ||Chartered Accountants |
| ||FRN: 118493W |
|Place: Vadodara || |
|Date: 30th May 2019 ||CA Dhirendra P Shah |
| ||(Partner) |
| ||Membership No: 03046 |