To the Members of BHAGERIA INDUSTRIES LIMITED Report on the Audit of the FinancialStatements
We have audited the financial statements of BHAGERIA INDUSTRIES LIMITED ("theCompany") which comprise the Balance Sheet as at 31st March 2017 and the Statementof Profit and Loss and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory 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.This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Auditor's Responsibilities for the Audit of the Financial Statements
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 thereunder.
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 judgment 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation 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 standalone 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 manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March312017 and profit/loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1.) 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 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 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 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 to ourseparate Report in "Annexure A".
(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 has disclosed the impact of pending litigations on its financialposition in its financial statements in Note No. 26.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealing 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 books of accountmaintained by the Company and as produced to us by the Management.
2) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) Act we give in"Annexure B" a statement on the matters specified in paragraph 3 & 4 of theorder to the extent applicable.
For Sarda & Pareek
Membership No- 110208
Date: May 09 2017
"ANNEXURE A" TO THE AUDITOR'S REPORT
Annexure referred to in Para 1(f) of our report of even date on financial statementsfor the year ended 31st March 2017 of BHAGERIA INDUSTRIES LIMITED.
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 BHAGERIAINDUSTRIES LIMITED ("the Company") as of 31st March 2017 in conjunction withour audit of the financial statements of the Company for the year ended as on March 312017.
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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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") 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 both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 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 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 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:-
1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance 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 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 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 31st March 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 by the Institute of CharteredAccountants of India.
For Sarda & Pareek
Membership No- 110208
Date: May 09 2017
"ANNEXURE B" TO THE AUDITOR'S REPORT
Annexure referred to in Para 2 of our Report of even date on the financial statementsfor the year ended 31st March 2017 of BHAGERIA INDUSTRIES LIMITED.
Report as per Sub-section 11 of Section 143 of the Companies Act 2013 ("theAct").
Based on the audit procedures performed for the purpose of reporting a true and fairview of the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books and other records examined by us inthe normal course of our audit in our opinion and to the best of our knowledge we reportthat:
I. In respect to Fixed Assets :-
(a) The Company has maintained proper record showing full particulars includingquantitative details and situation of its fixed assets.
(b) Fixed asset was physically verified during the year by the management which in ouropinion is considered reasonable. No material discrepancies were noticed on suchverification.
(c) The title deeds of immovable properties are held in the name of the company.
II. In Respect of inventory :-
(a) The inventories have been physically verified during the year by the management.The procedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
(b) During such verification no material discrepancies where noticed.
III. The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under sec 189 of the Act. Thereforethe provision of Clause (III) and its sub-clauses of the order are not applicable to thecompany.
IV The company has complied with the provisions of section 185 and 186 of the CompaniesAct 2013 in respect of loans. There is no loan given investments made guarantees givenor security provided by the Company to any entity covered under the provision of Section185 and 186 of the Companies Act 2013. Therefore the provision of Clause (IV) of theorder is not applicable to the company.
V. The Company has not accepted any public deposit for the year ended 31st March 2017therefore Clause (v) of the order is not applicable to the company.
VI. The Company has not been prescribed by the Central Government under section 148(1)of the Companies Act 2013 to maintain cost records & such accounts and records havebeen made & maintained.
VII. (a) The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Investor Education and Protection Fund Employees' StateInsurance Income Tax Sales Tax Service Tax Wealth Tax Custom Duty Excise Duty CessVAT and other material statutory dues with appropriate authorities. The company did nothave any undisputed amount payable in this respect at 31st March 2017 for a period ofmore than six months from the date they become payable.
(b) On the basis of examination of books of account there is no dues of income taxWealth Tax Service Tax Customs Duty Excise Duty and Cess which is disputed and notdeposited. The particulars of Dues of Sales tax as on 31st March 2017 which has not beendeposited on account of a dispute are given below:-
| || || || || |
Amount Involved (' In Lakhs)
|Statute ||Nature of Dues ||Forum where Dispute is pending ||Period to which amount relates ||31/03/17 ||31/03/16 |
|The Maharashtra Value Added Tax2002 ||Value Added Tax ||Deputy Commissioner of Dales Tax (Appeals) ||2006-07 ||1.48 ||1.48 |
|The Maharashtra Value Added Tax2002 ||Value Added Tax ||Deputy Commissioner of Dales Tax (Appeals) ||2008-09 ||2.37 ||2.37 |
|The Maharashtra Value Added Tax2002 ||Value Added Tax ||Deputy Commissioner of Dales Tax (Appeals) ||2010-11 ||1.4 ||1.4 |
|The Gujarat Value Added Tax Act2006 ||Sales-Tax ||Gujarat Value Added Tax Tribunal Ahmedabad ||2008-09 ||8.81 ||8.81 |
| || || ||Total ||14.06 ||14.06 |
VIII. The Company has not defaulted in repayment of dues to any financial institutionor bank as at the balance sheet date.
IX. The company has not raised money by way of initial public offer or term loans andhence reporting under clause (IX) of the order is not applicable.
X. As explained to us no fraud on or by the Company has been noticed or reportedduring the period covered by our audit.
XI. The managerial remuneration has been paid in accordance with the provision of thesection 197 read with the Schedule V to the Companies Act
XII. The company is not a Nidhi Company therefore; Clause (XII) of the order is notapplicable to the company.
XIII According to the information and explanations given to us all transactions withthe related parties are in compliance with sections 177 and 188 of Companies Act 2013where applicable and the details have been disclosed in the Financial Statements etc. asrequired by the applicable accounting standards
XIV The Company has not made any preferential allotment or private placement of sharesor debentures during the year therefore Clause (XIV) of the order is not applicable tothe company.
XV According to the information and explanations given to us the company has notentered into any noncash transactions with directors or persons connected with himtherefore Clause (XV) of the order is not applicable to the company.
XVI The company is not required to be registered under section 45-lA of the ReserveBank of India Act 1934 therefore Clause (XVI) of the order is not applicable to theCompany.
For Sarda & Pareek
Membership No- 110208
Date: May 09 2017