To the Members of
Baroda Extrusions Limited
Report on the Ind AS Financial Statements
01. We have audited the accompanying financial statements Baroda ExtrusionLimited ("the Company") which comprise the Balance Sheet as at March 312017 the Statement Profit and Loss the Cash Flow Statement and the statement of changesin Equity for the year then ended and a summary of the significant accounting policies andother explanatory information.
Management's Responsibility for the Ind AS Financial Statements
02. The Company's Board of Directors of the Company are responsible for the mattersstated in the section 134(5) of the Companies Act 2013 (the act') respect topreparation of these Ind AS financial statements that give a true and fair view of thestate of affairs (financial position) loss (financial performance including othercomprehensive income) and flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standards(And AS') specified under Section 133 of the Act.
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 ofapp priate 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.
03. Our responsibility is to express an opinion on these Ind AS financialstatements based on our audit.
04. 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.
05. We conducted our audit of the Ind AS financial Statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainonable assurance about whether the Ind AS financial statements are free from materialmisstatements.
06. An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the Ind AS financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the Ind AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the
Company's preparation of the Ind AS financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Ind AS financial statements.
07. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Ind AS financial statements.
08. In our opinion and to the best of our information and rding 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 of the state of affairs of the Companyas at March 31 2017 it's and loss and its cash flows and changes in Equity for the yearended on that date.
Emphasis of Matter
09 We draw your attention to the following
The Company is "Sick Industrial Company" under the provisions of SickIndustrial Companies Act 1985. The Company has made reference to Board for Industrial andFinancial Reconstruction New Delhi (BIFR) u/s 15(1) of SICA 1985 dated 15.10.2015 and BIFRregistered the same on 26.11.20 .
The Ministry of Finance vide a notification dated 25th November 2016 has repealed theSick Industrial Companies (Special Provisions) Act 1985 (SICA) with effect from 1stDecember 2016 and therefore reference made by the company stands abated. The managementof the company has not made an application to the NCLT under the Code. However themanagement of the Company is trying to out of the situation in spite of Issue of TakeoverNotice by SICOM LIMITED under section 29 of State Financial Corporation Act 1951 to thecompany for recovery of its dues The "Going Concern" status of the Company isnot affected as physical possession of the have not been taken. Ind AS financialstatements of the Company have been prepared on a "Going Concern" basisnotwithstanding the fact that the Company has been incurring cash losses and its net worthhas been fully eroded as on March 31 2017.
Filing of winding up petition by SICOM LIMITED in The igh Court of Gujarat on28.07.2014 u/s 433 and 434 under The Companies Act 1956.
Balances of Secured Loans as at 31.03.2017 are subject to their confirmation andreconciliation.
Non-provision of doubtful debts amounting to Rs. 221263 7/- and to that extent theloss for the year is understated.
Balances of sundry debtors sundry creditors advances and others as at 31.03.2017 aresubject to their confirmation and reconciliation.
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.
Report on other Legal and Regulatory Requirements
09. 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 thebest of 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 Statementand statement of changes in Equity dealt with by this Report are in agreement with thebooks of account.
d. In our opinion the aforesaid Ind AS financial statements comply with the Ind ASprescribed under Section 133 of the Act.
e. The going concern matter described in subparagraph under Emphasis on the Matterabove may have adverse effect on the functioning of the Company.
f. On the basis of the written representations received from the directors as onMarch 31 2017s taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of Section164(2) of the Act.
g. With respect to adequacy of the internal financial control over the financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure A.
h. With respect to other matters to be included in the Auditor's in accordance withRule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the bestof our knowledge and belief and according to the information and explanations given to us:
i) The Company has disclosed the impact of pending litigations as at March31 2017 onits financial position in its financial statements as referred to in Note No.24 & 25.
ii) The Company did not have any long-term contracts including derivative contracts;for which there were any material foreseeable losses.
iii) There has not been an occasion in case of the Company uring the year under reportto transfer any sums to the Investor Education and Protection Fund. The question of delayin transferring such sums does not arise.
iv) The Company has provided the requisite disclosures in Ind AS financial statementsas regards to its holding and dealing in Specified Bank Notes as defined in thenotification S.O. 3407(E) dated November 08 2016 of the Ministry of Finance during theperiod from November 08 2016 to December 30 2016 and based on au procedure performed andthe representation provided by the Management we report that the disclosures are inaccordance with the books of account maintained by the Company and as produced to us bythe management (refer Note No. 41 )
10. As required by the Companies (Auditor's Report) Order 2016 ("CARO2016") issued by the Central Government of India in terms of Section143 (11) of theAct and on the basis of such checks of the books and records of the company as weconsidered appr riate and according to information and explanations given to us we givein the Annexure B a statement on the matters specifies in paragraphs 3 and
4 of CARO 2016.
For Parikh Shah Chotalia & Associates
CA Vijay Parikh (Partner)
Membership No: 031773
Date: 29th May 2017
Annexure A to the Auditors' 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 the financial reporting of BarodaExtrusion Limited ("the Company") as of 31st March 2017 in conjunction withour audit of the Ind AS financial statements of the Company for the year ended on thatdate.
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 of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation an maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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(the "Guidance Note") issued by ICAI and the Standards on Auditing issued byICAI and deemed to be prescribed under section 143(10) of the Com Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofinternal financial controls. Those Standards and the Guidance Notes require that we complywith ethical requirements and plan and perform the audit to obtain ble assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 Ind AS 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 ou 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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Ind AS financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditu of the company are being made onlyin accordance with authorizations of management and directors of the company; and
(3) 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 over financial reportingincluding the possibility of collusion or improper managements override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of c in conditions or that the degreeof compliance with the policies or procedures may deteriorate.
In our opinion the Company have in all material respects inadequate internalfinancial controls system over financial reporting and in view of this we are unableexpress our opinion whether such internal financial controls over financial reporting wereoperating effectively or not as at 31st March 2017 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance on Audit of Internal FinancialControls over Financial Reporting issued by the ICAI.
For Parikh Shah Chotalia & Associates Chartered Accountants CA Vijay Parikh(Partner) Membership No: 031773 F.R.N: 118493W
Date: 29th May 2017
Annexure - B to Independent Auditor's Report
Referred to in paragraph 9 of the Independent Auditor's Report of even date to themembers of Baroda Extrusion Limited on the financial statements for the year ended March31 2017.
i. (a) The Company has generally maintained records showing broadly particulars offixed assets.
The fixed asset register needs to be updated.
(b) The fixed assets of the Company have not been physically verified by the Managementduring the year and material discrepancies if any have been not been ascertained.
(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 maintained underSection 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 Reserve Bank of Indiaprovisions of Sections 73 to 76 of the Act and the Rules framed there under are notapplicable to the Company.
vi. The Central Government has specified maintenance of cost records under Sub section(1) of
Section 148 of the Act. We have not made a detailed examination of the records if anymade and maintained with a view to determine whether they are accurate or complete.
37 vii. (a) According to the information and explanations given to us and on the basisof examination 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 etc have been generally deposited by the Company during theyear with the appropriate authorities. According to the information and explanations givento us no undisputed amounts payable in respect of statutory dues were in arrears at 31stMarch 2017 for a period of more than six months from the date they become payable.
(b) 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 Sale Tax ValueAdded Tax etc. which have not been deposited on account of any dispute.
viii. 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 2013-14 2014-15 2015-16 and 2016-17) The Company has defaultedin repayment of its dues to SICOM Ltd since last five years.
ix. 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.
x. 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. xi. The Company hasnot paid/ provided for managerial remuneration in accordance with the provisions ofSection 197 read with Schedule V to the Act.
xii. The provisions of Clause 3(xii) of the Order are not applicable to the Company asthe Company is not a Nidhi Company.
xiii. 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.36)
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.
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 its
Directors or persons connected with him. xvi. The provisions of Clause 3(xvi) of theOrder are not applicable to the Company as it is not required to be registered underSection 45-IA of the Reserve Bank of India Act 1934.
For Parikh Shah Chotalia& Associates
CA Vijay Parikh
Membership No: 031773
Date: 29th May 2017