INDEPENDENT AUDITORS REPORT
TO THE MEMBERS OF
G.R. CABLES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of G.R. Cables Limited ("TheCompany") which comprise the Balance Sheet as at March 31 2018 the Statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary of thesignificant accounting policies and other 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 Act2013 ("the Act") with respect to 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 withaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with provision of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
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 there under. We conducted our audit in accordancewith the 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 obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
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.
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 March31 2018 and its profit 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 in terms of Section 143(11) of the Companies Act 2013we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
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 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 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 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:
a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.
b. The Company did not have any material foreseeable losses relating to long- termcontracts including derivative contracts.
c. There has been no delay in transferring amounts required to be transferred to theInvestors Education and Protection Fund by the Company.
d. The Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016 and these are in accordance with the books ofaccounts maintained by the Company.
Annexure to the Independent Auditors' Report on the Financial Statements
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report on the financial statements of even date) (1) (a) The company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets.
(b) The fixed assets have been physically verified by the management at reasonableintervals and no material discrepancies have been noticed on such verification.
(2) (a) The physical verification of inventory has been conducted at reasonableintervals by the management during the year.
(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us thecompany is maintaining proper records of inventory and no material discrepancies werenoticed on physical verification.
(3) According to the information and explanations given to us the Company has notgranted loans secured or unsecured to companies firms or other parties covered in theRegister maintained under Section 189 of the Companies Act 2013.
(4) (a) In our opinion and according to the information and explanations given to usthere is an adequate internal control system commensurate with the size of the Company andthe nature of its business for the purchase of inventory and fixed assets and for the saleof services and
(b) During the course of our audit we have not observed any continuing failure tocorrect major weaknesses in such internal control system.
(5) The company has not accepted any deposits to which the directives issued by theReserve Bank of India and provisions of Sections 73 to 76 or any other relevant provisionsof the Companies Act 2013 and the rules framed there under would apply.
(6) The maintenance of cost records specified by the Central Government to which theprovisions of section 148(1) of the 2013 Act would apply are under compilation.
(7) (a) According to the information and explanations given to us and on the basis ofour examination of the books of account the company has been regular in depositing withappropriate authorities undisputed statutory dues including income tax sales tax Valueadded tax wealth tax service tax customs duty excise duty cess and other materialstatutory dues applicable to it except provident fund and employees' state insurance.
(b) According to the information and explanations given to us there are no dues inrespect of sales tax income tax customs duty wealth tax service tax excise duty andcess that have not been deposited with the appropriate authorities on account of anydispute. The company has a deferred sales tax loan of Rs. 851.73 lakhs as its liability.
(8) The company have accumulated losses of Rs. 3936.79 Lacs exceeding fifty percent ofits net worth at the end of the financial year and has incurred a cash loss of Rs. 17.99lacs in the financial year and a cash loss of Rs. 19.63 lacs in the financial yearimmediately preceding such financial year.
(9) In our opinion and according to the information and explanations given to us thelending banks has initiated legal proceedings against the company for recovery of loanamounts. The Company has not issued any debentures. (10) According to the information andexplanations given to us the company has not given any guarantee for loans taken byothers from banks or financial institutions. Accordingly clause (x) of the Order is notapplicable.
(11) The company has not raised any Term Loans during the year. Accordingly clause(xi) of the Order is not applicable.
(12) According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the course of our audit.
Annexure B 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 controlsover financial reporting of G.R CABLES LTD ('the Company') as of 31 March 2018 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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 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 the Company's policies the safeguarding of its assetsthe prevention 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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of thestandalone 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 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations of themanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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 31 March 2018 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.
SMG & Associates
F R No : 012605S
CA Yalla Reddy Vootkuri