Gajra Bevel Gears Ltd.
|BSE: 505711||Sector: Auto|
|NSE: N.A.||ISIN Code: INE282D01010|
|BSE 00:00 | 27 Dec||Gajra Bevel Gears Ltd|
|NSE 05:30 | 01 Jan||Gajra Bevel Gears Ltd|
|BSE: 505711||Sector: Auto|
|NSE: N.A.||ISIN Code: INE282D01010|
|BSE 00:00 | 27 Dec||Gajra Bevel Gears Ltd|
|NSE 05:30 | 01 Jan||Gajra Bevel Gears Ltd|
GAJRA BEVEL GEARS LIMITED
Report on the Audit of the Financial Statements
We have audited the financial statements of Gajra Bevel Gears Limited ("theCompany") which comprises the Balance Sheet as at March 31 2019 the statement ofProfit & Loss (including Other Comprehensive Income) the statement of Changes inEquity and the Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
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 theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31st 2019 the loss and totalcomprehensive income changes in equity and its cash flows of the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with Standards on Auditing (SAs). Ourresponsibilities 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 in accordance with the ethical requirements that are relevantto our audit of the financial statements as per the ICAI s Code of Ethics and theprovisions of the Companies Act 2013 and we have fulfilled our ethical responsibilitiesin accordance with these requirements. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Emphasis on the Matter
Company has accumulated losses which has eroded the entire new worth of the Company andmade the Company financially sick. Based on the audited financial statements as on30.09.2008 the Company had filed a reference under section 15(1) of the SIC (SP) Act1985 with the BIFR and same is registered as case no. 27/2009 on 30.07.2009. The BIFR wideits order issued during the hearing held on 06.01.2010 declared the Company as SICKINDUSTRIAL COMPANY in terms of section 3(1)(o) of Sick Industrial Companies (SpecialProvisions) Act 1985. During the course of pendency of reference with BIFR themanagement of Company has settled the loan accounts of State Bank of India IFCI IDBIMPSIDC and MPAVN as well as made full and final payments as per the terms of OTS. OTS withMadhya Pradesh Financial Corporation s term loan is still in process.
By notification no. 50 388(E) dated 25.11.2016 the SICA Repeal Act 2003 has beennotified w.e.f. 01.12.2016 and as per section 252 read with schedule VIII of theInsolvency and Bankruptcy Code 2016. The reference filed with the BIFR/ABIFR is abatedand the Company may file a fresh reference before NCLT within 180 days from the date i.e.31.05.2017 but the Company has still not filed any reference.
Material Uncertainty Related to Going Concern
We draw attention to Note No. 23 in the financial statements which indicates that theCompany has ceased its commercial operation & production from financial year 2008-09.In addition to this it was declared as Sick Industrial Company in terms of section3(1)(o) of Sick Industrial Companies (Special Provisions) Act 1985 on 06.01.2010. Thisindicates that material uncertainty exists that may cast significant doubt on thecompany's ability to continue as a going concern. Our opinion is not modified in respectof this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. We havedetermined that in addition to the matter reported in Material Uncertainty Related toGoing Concern para there are no key audit matters to communicate in our report.
Information other than the Financial Statements & 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 Annexures to Board s Report and otherinformation included in Annual Report but does not include the financial statements andour auditor s report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Management s Responsibility for the Financial Statements
The Company s Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the state of affairs (financial position) profit or loss(financial performance including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany s ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The 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 withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material mis-statement of the 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 control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for explaining our opinion on whether the Companyhas adequate internal financial controls system in place and the operating effectivenessof 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually 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.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor s report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal & Regulatory Requirements
1. As required by Section 197(16) of the Act we report that the company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act.
2. As required by the Companies (Auditor s Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the " Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.
3. As required by Section 143(3) of the Act based on our audit 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 purpose 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 Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account;
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder 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 March31st 2019 taken on record by the Board of Directors none of the directors isdisqualified as on March 31st 2019 from being appointed as a director in termsof section 164(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 in "Annexure B". Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company s internal financial controls overfinancial reporting.
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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. the Company has disclosed the impact of pending litigations on its financialposition in the financial statements;
ii. the Company did not have any long-term contract including derivatives for whichthere was material foreseeable losses;
iii. there is / has been no such amounts which is / was required to be transferred to
Investor Education and Protection Fund by the Company during the year ended on March31st 2019;
"ANNEXURE-A TO THE INDEPENDENT AUDITOR S REPORT OF EVEN DATE TO THE MEMBERS OFGAJRA BEVEL GEARS LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31ST2019"
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
1) In respect of the Company s fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Company has a regular program for physical verification of its fixed assets in aphased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.
Although records of fixed assets have been maintained properly the Company is not intooperation since long hence production facilities are standing ideal. Working conditionsof the fixed assets cannot be commented upon.
c) The title deeds of all the immovable properties are held in the name of the Company.
2) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year. In our opinion and according to the information andexplanation given to us the physical verification of inventories followed by themanagement were reasonable and adequate in relation to the size of the Company and thenature of its business. The discrepancies noticed on physical verification of inventoriesas compared to book records were not material and have been properly dealt with in thebooks of accounts. All the inventories of the Company are non-moving since long butmanagement is of the opinion that they have values to the tune as stated in the financialstatements and accordingly there exists no need to write off or provide for the reductionin value.
3) 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. Accordingly provisions under clause 3(iii)(a) to(c) of the Order are not applicable.
4) In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofloans investments guarantees and security.
5) In our opinion and according to the information and explanation given to us theCompany has not accepted any deposits within the meaning of Sections 73 to 76 of the Actand the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly theprovisions of clause 3(v) of the Order are not applicable.
6) The Company is not required to maintain cost records as specified by the CentralGovernment under sub section (1) of section 148 of the Companies Act 2013. Accordinglythe provisions of clause 3(vi) of the Order are not applicable.
7) In respect to statutory dues:
a) According to the records of the Company and information and explanations given tous the Company is irregular in depositing undisputed statutory dues such as providentfund employees state insurance income-tax duty of excise and value added tax asapplicable with the appropriate authorities. However after the grant of installmentfacility the company has cleared the dues of provident fund.
The extent of the arrears of outstanding statutory dues as on the last day of thefinancial year concerned for a period of more than six months from the date they becamepayable are as under:
b) Assessed demands of Commercial Tax against which the Company has preferred forrevision before the Competent Authority have not been accounted for as liability are asunder:
8) In our opinion and according to the information and explanations given to us duringthe year the Company has not made any payment towards the dues of Madhya PradeshFinancial Corporation the outstanding amount in respect of which as on 31stMarch 2019 is Rs. 890.88 Lakhs. The Company did not have any outstanding loans orborrowings from banks government or any dues to debenture holders during the year.
9) In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) or term loan. Accordingly the provisions of clause 3(ix) ofthe Order are not applicable.
10) To the best of our knowledge and according to the information and explanation givento us no fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
11) In our opinion and according to the information and explanations given to usmanagerial remuneration has not been paid to any director. Accordingly provisions ofclause 3(xi) of the Order are not applicable.
12) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly provisions of clause 3(xii) of the Order arenot applicable.
13) In our opinion according to the information and explanations given to usand on thebasis of our examination of records of the Company the transactionswith the relatedparties are in compliance with Sections 177 and 188 of Act whereapplicable and therequisite details have been disclosed in the financial statements etc. as required by theapplicable Ind AS.
14) In our opinion according to the information and explanations given to usand on thebasis of our examination of records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review. Accordingly provisions of clause 3(xiv) of theOrder are not applicable.
15) In our opinionand according to the information and explanations given to us theCompany has not made / entered into any non-cash transactions with the directors orpersons connected with them covered under Section 192 of the Act.Accordingly provisionsof clause 3(xv) of the Order are not applicable.
16) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
"ANNEXURE-B TO THE INDEPENDENT AUDITOR S REPORT OF EVEN DATE TO THE MEMBERS OFGAJRA BEVEL GEARS LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31ST2019"
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 Control Over Financial Reporting of GAJRABEVEL GEARS LIMITED ("the company") as of 31 March 2019 in conjunction withour audit of the standalone 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 controls 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 Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company s policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable 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 based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial control 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 ethicalrequirement 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 statement whether due to fraud 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 ofmanagement 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 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 31stMarch 2019based on the internal control over financial reporting criteria established by the companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over financial Reporting issued by the Institute ofChartered Accountants of India.