TO THE MEMBERS OF GALADA POWER AND TELECOMMUNICATIONLIMITED HYDERABAD.
Report on theInd AS Financial Statements:
We have audited the accompanying Ind ASFinancial statements of GALADA POWER ANDTELECOMMUNICATIONLIMITED ("the Company") which comprise the Balance Sheet as at31st March 2018 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then ended anda summary of the significant 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 Act 2013 ("the Act") with respect to the preparation ofthese Ind AS Financial statements that give a true and fair view of the state of affairsprofit or loss including other comprehensive income cash flows and changes in equity ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind 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 of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS Financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS Financialstatements basedon our audit.
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 of the Ind AS Financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS Financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS Financialstatements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS Financialstatements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS Financialstatements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS Financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS Financialstatements.
In our opinion and to the best of our information and according 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 including the Ind AS of the state ofaffairs of the Company as at 31st March 2018 its profit its cash flows and the changesin equity for the year ended on that date.
Emphasis of Matter:
We draw attention to the following matters in the Notes to the financial statements:
a. Note 1 to the financial statements which indicates that the company has netaccumulated losses of Rs. 10111.87 lakhs as at the year ended March 31 2018 and as ofthat date the company's current liabilities exceeded its total assets by Rs. 4403.00lakhs. These conditions along with other matters as set forth in the said Note indicatethe existence of a material uncertainty that may cast significant doubt about thecompany's ability to continue as a going concern.
b. Note 33 to the financial statements regarding the non-provision of interest onworking Capital Loan.
c. Note 34 to the financial statements on non-compliance with the provisions ofSec-205-A (1) of the Companies Act 1956 regarding transfer of unpaid dividend to aspecial Bank Account.
d. Note 35 to the financial statements regarding the appointment and payment ofManagerial Remuneration.
Our opinion is not qualified in respect of these matters.
The comparative financial information of the Company for the year ended 31 March 2017and the transition date openingbalance sheet as at 1 April 2016 included in these Ind ASfinancial statements are based on the previouslyissuedstatutory financial statementsprepared in accordance with the Companies (Accounting Standards) Rules 2006audited by thepredecessor auditors whose audit report for the year ended 31 March 2017 and 31 March2016 dated 27 May 2017 and 26 May 2016 respectively expressed an unmodified opinion onthose financial statements asadjusted for the differences in the accounting principlesadopted by the Company on transition to the Ind AS which havebeen audited by us.
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 of India in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 the Cash Flow Statement andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.
(d) In our opinion the aforesaid Financial statements comply with the AccountingStandards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 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 B".
(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 Ind AS Financial statements - Refer Note 22 to the Financialstatements
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. According to the information and explanations given to us there were no amountswhich were required to be transferred to the Investor Education and Protection Fund by theCompany. (Refer Note34 to the Financial statements)
| ||for K.S.RAO& CO. |
| ||Chartered Accountants |
| ||Firm's Registration Number: 003109S |
| ||(T. SUKESH KUMAR) |
|Place : Hyderabad ||Partner |
|Date : May26 2018 ||Membership Number: 229963 |
Annexure -A to the Auditor's Report:
The Annexure referred to in Para 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date to the members ofGALADA POWERAND TELECOMMUNICATION LIMITED HYDERABAD for the year ended March 312018.
1. a- The Company has maintained proper records showing full particulars includingquantitative
details and situation of fixed assets.
b. As explained to us the management has physically verified the fixed assets duringthe year and there is a regular programme of physical verification which in our opinionis reasonable having regard to the size of the Company and the nature of the assets. Nodiscrepancies were noticed on such verification.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
2. The inventory has been physically verified during the year by the management. In ouropinion the frequency of verification is reasonable. No material discrepancies werenoticed on such verification between the physical stocks and book records.
3. a. During the year the Company has not granted any loans secured or unsecured toCompanies
firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Companies Act 2013.
b. In view of our comment in para (a) above Clause (III) (a) (b) and (c) of paragraph3 of the Companies (Auditor's Report) Order 2016 are not applicable to the Company.
4. In our opinion and according to the information and explanations given to us theCompany has not advanced any loan to any Director and no investments were made during theyear as referred to in sections 185 and 186 of the Act. Therefore the provisions ofParagraph 3(iv)of the of the Companies (Auditor's Report) Order 2016 are not applicable tothe Company.
5. The Company has not accepted any deposits from the public. Hence the provisions ofSections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under do not apply to this Company.
6. As the overall turnover of the Company for the year from all its products andservices is less than Rs. 35 Crores the provisions relating to maintenance of costrecords under sub-section (1) of 148 section of the Companies Act 2013 are not applicableto the Company.
7. a. According to the records the company is generally regular in depositingundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand all other material statutory dues with the appropriate authorities. However theextent of the arears of outstanding statutory dues as at March 31 2018 for a period ofmore than six months from the date they became payable are as follows.
|Nature of Statute ||Nature of the Dues ||Amount Rs. ||Period to which the amount relates ||Due date ||Date of payment |
|The Companies Act 1956 ||Investor Education and Protection Fund # ||11556699 ||1996 ||30.12.2003 ||Not yet paid |
|APGST Act ||IFST Loan Differed Sales Tax Sales tax ||311190 6710843 135000 ||1988 1996 2000 ||25.07.1997 01.04.2001 01.08.2001 ||Not yet paid |
|The Dadra and Nagar Haveli VAT Regulation 2005 ||CST ||13500 ||May 2017 ||20.06.2017 ||Not yet paid |
# refer note 34 to the financial Statements
b. According to the records of the Company and the information and explanations givento us there were no dues of income tax or sales tax or service tax orduty of customs orduty of excise or value added tax have not been deposited on account of any dispute.
8. In our opinion the company has defaulted in repayment of loans to financialinstitutions and banks. The details of such defaults are
i. Working Capital loan from Syndicate Bank - Rs. 264135400/- due from year 2000
ii. Stressed Assets Stabilisation Fund - Rs. 149700000/- Period of default 19 Months
iii. Edelweiss Asset Reconstruction Company Limited - Rs. 722000/- Period of default 1Month
iv. Unit Trust of India - Rs. 50000000/ Period of default 6 Months
9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Companies (Auditor's Report) Order 2016 is not applicable.
10. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
11. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided forremunerationto the Managing Director with effect from 01.01.2015 amounting to Rs.3751945/- and to the Executive Director with effect from 01.04.2017 amounting to Rs.691597/-which is subject to the approval of the Central Government as the company hasdefaulted in repayment of its debts in the preceding financial year before the date ofsuch appointment. As such the payment of remuneration is not in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct and the Company has not taken any steps for securing refund of the same.
12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Companies (Auditor'sReport) Order 2016 is not applicable
13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
14. According to the information and explanations give 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.
15. 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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Companies (Auditor's Report) Order 2016 is not applicable.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
for K.S.RAO& CO; Chartered Accountants Firm's Registration Number: 003109S
| ||(T. SUKESH KUMAR) |
|Place : Hyderabad ||Partner |
|Date : May26 2018 ||Membership Number: 229963 |
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 controls over financial reporting of GALADAPOWER AND TELECOMMUNICATION LIMITEDHYDERABAD ("the Company") as of 31 March2018in conjunction with our audit of the financial statements of the Company for the yearended 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 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 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 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.
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 authorisations of management and directors of the company; 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 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.
for K.S.RAO& CO. Chartered Accountants Firm's Registration Number: 03109S
| ||(T. SUKESH KUMAR) |
|Place : Hyderabad ||Partner |
|Date : May26 2018 ||Membership Number: 229963 |