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Forbes & Company Ltd.

BSE: 502865 Sector: Engineering
NSE: FORBESGOK ISIN Code: INE518A01013
BSE 00:00 | 20 Mar 2331.10 -47.60
(-2.00%)
OPEN

2377.95

HIGH

2390.00

LOW

2310.00

NSE 05:30 | 01 Jan Forbes & Company Ltd
OPEN 2377.95
PREVIOUS CLOSE 2378.70
VOLUME 1039
52-Week high 4150.00
52-Week low 1801.05
P/E 81.51
Mkt Cap.(Rs cr) 3,007
Buy Price 2320.00
Buy Qty 3.00
Sell Price 2330.00
Sell Qty 20.00
OPEN 2377.95
CLOSE 2378.70
VOLUME 1039
52-Week high 4150.00
52-Week low 1801.05
P/E 81.51
Mkt Cap.(Rs cr) 3,007
Buy Price 2320.00
Buy Qty 3.00
Sell Price 2330.00
Sell Qty 20.00

Forbes & Company Ltd. (FORBESGOK) - Auditors Report

Company auditors report

To the Members of Forbes & Company Limited

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone financial statements of Forbes &Company Limited ("the Company") which comprise the Balance Sheet as at March31 2018 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

2. 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 Ind AS financial statements to 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 specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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 standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.

5. We conducted our audit of the standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

7. We believe that the audit evidence we have obtained is and appropriate to provide abasis for our audit opinion on the standalone Ind AS financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2018 and its total comprehensive income (comprising of profit andother comprehensive income) its cash flows and the changes in equity for the year endedon that date.

Other Matter

9. The Ind AS financial statements of the Company for the year ended March 31 2017were audited by another firm of chartered accountants under the Companies Act 2013 whovide their report dated May 25 2017 expressed an unmodified opinion on those financialstatements. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of subsection (11) of section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

11. 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 (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act.

(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 controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure A.

(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 knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at March 312018 on its financial position in its standalone Ind AS financial statements Refer Notes19A and 39;

ii. The Company has long-term contracts as at March 31 2018 for which there were nomaterial foreseeable losses. The Company did not have any derivative contracts as at March31 2018.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2018.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2018.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sarah George
Place: Mumbai Partner
Date: May 28 2018 Membership Number: 045255

Annexure A to Independent Auditors' Report

Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to themembers of Forbes & Company Limited on the standalone Ind AS financial statements forthe year ended March 31 2018

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section

143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of Forbes & Company Limited ("the

Company") as of March 31 2018 in conjunction with our audit of the standalone IndAS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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 Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk.

The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

5. We believe that the audit evidence we have obtained is and appropriate to provide abasis for our audit opinion on the Company's internal financial controls system withreference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A Company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A

Company's internal financial control with reference to financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the Company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of theCompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2018 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.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sarah George
Place: Mumbai Partner
Date: May 28 2018 Membership Number: 045255

Annexure B to Independent Auditors' Report

Referred to in paragraph 10 of the Independent Auditors' Report of even date to themembers of Forbes & Company Limited on the standalone Ind AS financial statements forthe year ended March 31 2018 i. (a) The Company is maintaining proper records showingfull particulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a programmedesigned to cover all the items once in two years which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogramme all fixed assets have been physically verified by the Management during theyear and no material discrepancies have been noticed on such verification. (c) The titledeeds of immovable properties other than self - constructed properties as disclosed inNotes 5 6 and 14 on fixed assets to the standalone Ind AS financial statements are heldin the name of the Company except in respect of the following:

(` in Lakhs)

Particulars Gross Block Net Block Remarks
(Cost) (WDV)
Land and building in Mumbai and Delhi 26.88 14.03 Held in the name of Gokak Patel Volkart Limited 2nd erstwhile name of the Company. (Includes land cost Rs 7.80 Lakhs and WDV – Rs 4.85 Lakhs under ‘Prepaid Leasehold Assets' in Note 14 – Other Assets and investment properties costing Rs 19.08 Lakhs and WDV- Rs 9.18 Lakhs is reflected under Note 6 Investment Properties).
Freehold land at Chandivali Mumbai 38.62 38.62 Held in the name of ‘Forbes Forbes Campbell & Co. Limited' an entity that was merged with Gokak Patel Volkart Limited (the Company's 2nd erstwhile name). Cost/ WDV aggregating Rs 38.62 Lakhs has been included in Note 5 – Property Plant and Equipment.
Lease rights for land and self-constructed building at Fort Mumbai in the possession of Company 1129.42 490.64 The property is the name of Forbes Forbes Campbell & Co. Limited and the Company has made an application for renewal of lease for which approval is awaited from authorities. Building cost - Rs 976.95 Lakhs and WDV - Rs 424.41 Lakhs reflected under Note 6 Investment Properties and Building costing Rs 152.47 Lakhs and WDV - Rs 66.23 Lakhs as reflectedin Property Plant and Equipment. Note 5
Land factory building and office premises at Mumbai Thane Ahmedabad Bangalore and Chennai 1624.96 1565.54 These premises are in the name of Forbes Gokak Limited the 3rd erstwhile name of the Company. Includes Building cost - Rs 7.92 Lakhs and WDV - Rs 4.38 Lakhs classified under Note 5 Property Plant and Equipment investment properties costing Rs 1615.38 Lakhs WDV –` 1560.44 Lakhs included in Note 6 and cost of Rs 1.65 Lakhs WDV – ` 0.72 Lakhs under ‘Prepaid Leasehold Assets' in Note 14 – Other Assets).
Premises at Chennai 40.76 - This investment property is in the name of Facit Asia Limited an entity merged with FAL Industries Limited (this entity was subsequently merged with Forbes Gokak Limited the Company's 3rd erstwhile name).
Premises at Tuticorin 27.36 13.60 This investment property is in the name of Volkart India Limited an entity that was merged with Patel Volkart Limited (which was subsequently amalgamated with the Gokak Mills Limited the Company's 1st erstwhile name).

ii. The physical verification of inventory (excluding stocks with third parties andreal estate work-in-progress) have been conducted at reasonable intervals by theManagement during the year. In respect of inventory lying with third parties these havesubstantially been confirmed by them. The discrepancies noticed on physical verificationof inventory by Management as compared to book records were not material. Further inrespect of real estate work-in-progress inventories comprising of expenditure incurred onacquisition of development rights and other expenditure on construction and developmentthereof have been physically verified by the Management during the year.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013 ("the Act"). Therefore the provisions ofClause 3(iii) (iii)(a) (iii)(b) and (iii)(c) of the Order are not applicable to theCompany.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of 185 and 186 of the Companies Act 2013 inrespect of the loans and investments made and guarantees and security provided by it.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of income taxes though there has been a slight delayin few cases and is regular in depositing undisputed statutory dues including providentfund employees' state insurance sales tax income tax service tax duty of customsduty of excise value added tax cess goods and service tax with effect from July 1 2017and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of goods and service tax which have not beendeposited on account of any dispute. The particulars of dues of income tax sales taxservice tax duty of customs duty of excise duty and value added tax as at March 312018 which have not been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount Period to which the amount relates Forum where the dispute is pending
(` in Lakhs)
The Income Tax Act 1961 Income Tax 14.97 Financial Year 2000-01 Commissioner of Income Tax
(Appeals)
The Finance Act 1994 Service Tax 732.68 Financial Years 2006-07 to 2012-13 Commissioner of Service Tax
The Customs Act 1962 Penalty 0.93 Financial Year 2012-13 Customs Excise and Service Tax Appellate Tribunal
100.00 Financial Year 2011-12 High Court of Kerala
The Central Excise Act 1944 Excise Duty (including interest and penalty as applicable) 2722.90 Financial Years 2005-06 to 2006-07 Customs Excise & Service Tax Appellate Tribunal
20.67 Financial Years 2003-04 to 2004-05 Commissioner of Central Excise (Appeals)
24.71 Financial years 2005-06 to 2014-15 Deputy Commissioner of Central
Excise
4.86 Financial Years 2000-01 to 2004-05 Assistant Commissioner of Central
Excise
Sales Tax Laws Sales Tax (including interest and penalty as applicable) 91.62 Financial Years 1990-91 to 1994-95 1998-99 2001-02 to 2002-03 Sales Tax Appellate Tribunal
55.42 Financial Years 2005-06 2008-09 to 2009-10 and 2012-13 Joint Commissioner of Appeals Sales Tax
172.75 Financial Years 2000-01 to 2005-06 Assistant Commissioner of Commercial Taxes
65.23 Financial Years 1993-94 1997-98 Deputy Commissioner of Appeals
1999-00 2002-03 2005-06 to 2006-07
3.95 Financial Year 2004-05 Commercial Tax Officer

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at theBalance Sheet date.

ix. In our opinion and according to the information and explanations given to us themoney raised by way of term loans have been applied on an accrual basis for the purposefor which they were obtained. As the Company has not raised any money by way of initialpublic offer and further public offer (including debt instruments) the provisions ofClause 3(ix) of the Order to that extent are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers informed ofany such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the 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 party transactions have been disclosed in the Ind ASfinancial statements as required under Indian Standard (Ind AS) 24 Related PartyDisclosures specified under Section 133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under audit. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sarah George
Place: Mumbai Partner
Date: May 28 2018 Membership Number: 045255