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Garware Technical Fibres Ltd.

BSE: 509557 Sector: Industrials
NSE: GARFIBRES ISIN Code: INE276A01018
BSE 00:00 | 06 May 2674.50 50.05
(1.91%)
OPEN

2587.70

HIGH

2686.00

LOW

2587.70

NSE 00:00 | 06 May 2676.80 56.85
(2.17%)
OPEN

2615.00

HIGH

2689.25

LOW

2611.95

OPEN 2587.70
PREVIOUS CLOSE 2624.45
VOLUME 1165
52-Week high 2789.00
52-Week low 1240.05
P/E 31.08
Mkt Cap.(Rs cr) 5,515
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2587.70
CLOSE 2624.45
VOLUME 1165
52-Week high 2789.00
52-Week low 1240.05
P/E 31.08
Mkt Cap.(Rs cr) 5,515
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Garware Technical Fibres Ltd. (GARFIBRES) - Auditors Report

Company auditors report

The Members

GARWARE TECHNICAL FIBRES LIMITED (Formerly: GARWARE-WALL ROPES LIMITED)

1. Opinion

We have audited the accompanying Standalone Financial Statements of GARWARETECHNICAL FIBRES LIMITED (Formerly: GARWARE-WALL ROPES LIMITED) (hereinafter referredto as "the Company") which comprise the Standalone Balance Sheet as at 31stMarch 2020 the Standalone Statement of Profit and Loss (including Other ComprehensiveIncome) Standalone Statement of Changes in Equity and Standalone Statement of Cash Flowsfor the year then ended and notes to Standalone Financial Statements including a summaryof the significant accounting policies and other explanatory information (hereinafterreferred to as "Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31st March 2020 and profit and othercomprehensive income changes in equity and its cash flows for the year ended on thatdate.

2. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

3. Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matter described below to be thekey audit matters to be communicated in our report.

Key Audit Matter How our audit addressed the key audit matter
Inventory Existence: We have performed the following procedures with respect to the inventory:
The inventory's carrying value in the Balance Sheet as at 31st March 2020 is Rs 18692.26 lakhs. The inventory of the Company is held across various locations including its Plants Sales Depots Warehouses and Contract Manufacturers' locations.
• Evaluated the design and implementation of the controls over physical verification of inventory and tested the operating effectiveness of these controls during the interim periods.
On account of COVID-19 related nationwide lockdown we were unable to carry out inventory verification at the year end. Consequently we have performed the following alternate procedures to audit the existence of inventory:
We focussed on this matter because of the:
• significance of the inventory balance to the profit and statement of financial position • Obtained the records of physical verification procedures conducted by the management prior to lockdown and performed roll forward procedures.
• physical verification by the management was not observed physically by us subsequent to the year-end due to the restrictions imposed on account of COVID - 19. • In case of the stock held at third party locations obtained direct confirmation of the inventory held by the respective third parties.
There were no significant exceptions noted from these procedures. We tested a sample of inventory items to assess whether they were recorded at a value higher than that for which they could be sold. We did not identify any exceptions.

4. Information other than the Financial Statements and Auditor's Report thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the Financial Statements and our auditors' reportthereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

5. Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements The Company's Management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the state ofaffairs profit/loss and other comprehensive income changes in equity and cash flows 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 in accordancewith the provisions of the Act for safeguarding of 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 of theaccounting records relevant to the preparation and presentation of the StandaloneFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

6. Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol

• 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)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to Standalone Financial Statements inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the Standalone Financial Statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management's and Board of Directors useof the going concern basis of accounting and based on the audit evidence obtainedwhether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company's ability to continue as a going concern. If we concludethat a material uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the Standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when 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.

7. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government 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 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 Standalone Balance Sheet the Standalone Statement of Profit and Loss (includingother comprehensive income) the Standalone Statement of Changes in Equity and theStandalone Statement of Cash Flows dealt with by this Report are in agreement with thebooks of account.

d. In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards (Ind AS) specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 with reference toStandalone Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

g. With respect to other matters to be included in the Auditors' Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition- Refer Note No. 42 to the Standalone Financial Statement.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch 2020.

h. With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act:

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) of the Act whichare required to be commented upon by us.

For Mehta Chokshi & Shah LLP
Chartered Accountants
(FRN: 106201W/W100598)
ABHAY R. MEHTA
Partner
Place: Mumbai M. No.: 046088
Date: 30th June 2020 UDIN: 20046088AAAAAZ1467

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 7 (1) of our report of even date]

1) Clause (i)

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment and investmentproperties.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all items of property plant and equipment are verified by the management accordingto phased programme designed to cover all the items over a period of three years. In ouropinion the periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. No material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and on the basis of theexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

2) Clause (ii)

In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year. No material discrepancies were noticed on theaforesaid verification.

3) Clause (iii)

According to the information and explanations given to us the Company has not grantedany loans secured or unsecured to companies firms limited liability partnerships orother parties covered in the register maintained under Section 189 of the Companies Act2013 ('the Act'). Accordingly paragraphs 3 (iii) (a) (b) and (c) of the Order are notapplicable to the Company.

4) Clause (iv)

In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable

5) Clause (v)

In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

6) Clause (vi)

We have broadly reviewed the books of account maintained by the Company pursuant to therules prescribed by the Central Government for the maintenance of cost records underSection 148(1) of the Act with respect to the Company's products and are of the opinionthatprima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

7) Clause (vii)

(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Profession taxIncome Tax Duty of customs Employees' State Insurance Goods and Service tax Cess andother material statutory dues have been regularly deposited during the year with theappropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Profession tax Income Tax Dutyof customs Employees' State Insurance Goods and Service tax Cess and other materialstatutory dues were in arrears as at 31st March 2020 for a period of more than six monthsfrom the date they became payable;

(b) According to the information and explanations given to us there are no dues ofIncome-tax Sales tax Service tax Duty of customs Duty of excise Goods and Service taxand Value added tax as at 31st March 2020 which have not been deposited with theappropriate authorities on account of any dispute except as stated below:

Name of the Statute Nature of Dues Forum where Dispute is Pending Period to which Amount relates Amount ( Rs in lakhs) not deposited
Sales Tax Laws State and Central Sales Tax Deputy Commissioner of Sales Tax (Appeals) - Delhi 1999-2000 0.78
2000-01 3.43
2001-02 1.65
2002-03 1.29
Deputy Commissioner of Commercial Tax (Appeals) - Chennai 2006-07 2.00
Total 9.15

8) Clause (viii)

In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company does not have anyoutstanding dues to financial institutions and Government.

9) Clause (ix)

According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not raised any moneys by way of initialpublic offer or further public offer (including debt instruments) and has not obtained anyterm loans during the year. Accordingly paragraph 3 (ix) of the Order is not applicableto the Company

10) Clause (x)

Based upon the audit procedures performed and the information and explanations given bythe management we report that no fraud by the Company or on the Company by its officersor employees has been noticed or reported during the year.

11) Clause (xi)

According to the information and explanations given to us and based on our examinationof the records of the Company the Company has paid/provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

12) Clause (xii)

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 Order is notapplicable and hence not commented upon.

13) Clause (xiii)

According to the information and explanations given to us and based on our examinationof the records of the Company transactions with the related parties are in compliancewith Sections 177 and 188 of the Act where applicable and details of such transactionshave been disclosed in the Standalone Financial Statements as required by applicable IndAS.

14) Clause (xiv)

According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

15) Clause (xv)

According to the information and explanations given to us and based on our examinationof the records during the year the Company has not entered into non-cash transactionswith directors or persons connected with him. Accordingly paragraph 3 (xv) of the Orderis not applicable and hence not commented upon.

16) Clause (xvi)

In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For Mehta Chokshi & Shah LLP
Chartered Accountants
(FRN: 106201W/W100598)
ABHAY R. MEHTA
Partner
Place: Mumbai M. No.: 046088
Date: 30th June 2020 UDIN: 20046088AAAAAZ1467

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE FINANCIAL STATEMENTSOF GARWARE TECHNICAL FIBRES LIMITED FOR THE YEAR ENDED 31ST MARCH 2020 Report on theinternal financial controls with reference to the Aforesaid Standalone FinancialStatements under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act 2013.

(Referred to in paragraph 7(2)(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to Standalone FinancialStatements of Garware Technical Fibres Limited (hereinafter referred to as "theCompany") as of 31st March 2020 in conjunction with our audit of the StandaloneFinancial Statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to Standalone

Financial Statements and such internal financial controls were operating effectively asat 31st March 2020 based on the internal financial controls with reference to StandaloneFinancial Statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to Standalone Financial Statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding 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 (hereinafterreferred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to Standalone Financial Statements. 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 with reference to Standalone Financial Statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to Standalone Financial Statements andtheir operating effectiveness. Our audit of internal financial controls with reference toStandalone Financial Statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the Standalone Financial Statementswhether due to fraud or error. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the Company'sinternal financial controls with reference to Standalone Financial Statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial controls with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of Standalone Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to Standalone Financial Statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of Standalone Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; 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 Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with Reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with referenceto Standalone Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial controls with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For Mehta Chokshi & Shah LLP
Chartered Accountants
(FRN: 106201W/W100598)
ABHAY R. MEHTA
Partner
Place: Mumbai M. No.: 046088
Date: 30th June 2020 UDIN: 20046088AAAAAZ1467

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