To the Board of Directors of GEE Limited
Report on the Indian Accounting Standard ("Ind AS") Financial Statements forthe year ended 31st March 2021
We have audited the financial statements of GEE Limited(the Company) whichcomprise the Balance Sheet as at 31 March 2021 and the Statement of Profit and Loss(including other comprehensive income) Statement of Changes in Equity and Statement ofCash Flows and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to asthe financial statements). In our opinion and to the best of our informationand according to the explanations given to us the aforesaid financial statements give theinformation required by the Companies Act 2013 (the Act) in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2021and profit (including other comprehensive income) changes in equity and its cash flowsfor the year ended on that date.
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 Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
KEY AUDIT MATTERS
Key audit matters ('KAM') are those matters that in our professional judgment were ofmost significance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters.
|Key Audit Matter ||Auditor's Response |
|Disputed excise duty matter Rs. 2.07 Crores ||Procedures performed by the Auditor : |
|The Company had imported certain materials in the year 2008-09 where the excise authorities had demanded Rs. 4.02 Crores. Under the instructions from excise authorities the Company reversed under protest Rs. 3.09 Crores CENVAT credit availed during 2008-09. Thereafter the company filed an appeal with CESTAT claiming refund of Rs. 2.07 Crores. The appeal has been finally heard in January 2019. Based on legal and subject matter expert views the company expects considerable amount as relief in the above appeal case with CESTAT. (Refer Note No. 33 ||Our procedure in connection with company's claim regarding CENVAT Credit and refund of Rs. 2.07 Crores paid under protest involved examining the submissions made by the company's excise consultants. We also made independent enquiries with indirect tax experts who confirmed that this is a good case for contesting and they are of the opinion that the company can expect big relief in the matter. |
|Contingent Liabilities and Commitments) ||In light of the above we assessed the adequacy of disclosures in financial statements. |
|The company's scrutiny assessment for assessment year 2016-17 was completed in December 2018 and DCIT has raised tax demand of Rs. 70.96 lakhs against which the company has filed an appeal with CIT Appeals -1 Thane on 14th January 2019. The DCIT has disallowed the company's claim in respect of long term capital gain from sale of flat (property held for sale in books of accounts). The tax department's contention is that the period of capital gain is to be calculated from the date of registration of purchase agreement of the flat and not from the date of allotment letter given by the builder. The company's tax consultant has opined that there are several precedents confirming the company's claim and that they can expect a favourable outcome in this appeal matter. (Refer Note No. 33 Contingent Liabilities and Commitments) ||We have examined the grounds of appeal and statement of facts filed by the company with CIT Appeals -1 Thane in consultation with tax experts. We have also reviewed various judgements including High Court judgements which have gone against the revenue department in similar facts. There are few cases which have been determined in favour of the revenue department. The number of judgements against the revenue department outnumber the ones in their favour. We finally concluded that we should go by the Honourable Bombay High Court and ITAT decisions which have gone against the revenue department. In light of the above the company's disclosure in this matter is adequate. |
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 financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon. In connection with our auditof the financial statements our responsibility is to read the other information and indoing so consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit / loss (including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe 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 were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error. In preparingthe financial statements management and Board of Directors are responsible for assessingthe Company'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. Board of Directors is also responsible for overseeing theCompany's financial reporting 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 with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 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 expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of 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 auditors'report. 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.
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 ourauditors' 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 and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 (the Order)issued by the Central Government of India in terms of Section 143(11) of the Act we givein Annexure A a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.
(A) 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 Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 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 tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure B.
(B) 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 information and according to the explanations given to us:
i. The Company has disclosed in their IND AS financial statements matters relating topending litigations as at 31 March 2021 - (Refer Note 48 to the financial statement);
ii. As represented by the Company there are no long term contracts includingderivative contracts having material foreseeable losses - (Refer Note 50 to the financialstatement);
iii. As represented by the Company there has been no delay in transferring amountsrequired to be transferred to Investor Education and Protection Fund by the Company -(Refer Note No. 49 to financial Statement)
(C) With respect to the matter to be included in the Auditors' Report under section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.
Annexure A to the Independent Auditors' Report
[Referred to in paragraph pertaining to "Report on Other Legal and RegulatoryRequirement" of our Report of even date to the members of GEE Limited on the Ind ASfinancial statements for the year ended 31st March 2021]
I. a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets. b) Fixed assets have been physicallyverified by the management at reasonable interval and no material discrepancies werenoticed on such verification. c) All the title deeds of immovable properties are held inthe name of the Company
ii. The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. On the basis of our examinationof the inventory records in our opinion the Company is maintaining proper records ofinventory and there is no material discrepancies noticed on physical verification ofinventory.
iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies/irms/Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Accordingly the provisions of 3(iii) (a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.
iv. In our opinion and according to information and explanation given to us thecompany has complied with the provision of Section 185 and 186 of the
Companies Act with respect of providing or granting of loans making investments andproviding guarantees and securities.
v. The company has not accepted deposits from public within the meaning of Sections 73to 76 or any other relevant provisions of the Companies Act
vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules prescribed by the central government for maintenance of cost records under subsection (1) of Section 148 of Companies Act 2013 in respect of its products and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not carried out a detailed examination of the records withthe view to determine whether these are accurate or complete. For Financial year 2018-2019and 2019-20 the cost audit is pending.
vii. a) According to the information and explanation given to us and records of thecompany examined by us in our opinion the Company is regular in depositing undisputedstatutory dues including Provident Fund employee state insurance income tax GST customduty cess and any other statutory dues with the appropriate authorities. There are noundisputed statutory dues payable for a period of more than six months from the date theybecome payable as at 31stMarch 2021 However there were delays for payment of ProvidentFund of Rs. 1146373 Employee state insuarance of Rs. 21678 and Profession Tax of Rs.28380.
b) According to the information and explanations given to us and the records of theCompany examined by us following are Statutory dues of
Income tax sales tax value added tax custom duty and excise duty as at 31st March2021 which have not been deposited on account of dispute:
|Sr. No Name of . Statute ||Year ||Disputed Liability (in Rs.) ||Pre Deposit / Credit reversal ) (in Rs.) ||Net Liability (in Rs.) ||Forum where dispute is pending |
|1 Customs Act 1962 ||2008-09 ||10209629 ||1500000 ||8709629 ||CESTAT Mumbai |
|2 Customs Act 1962 ||2011-13 ||2865797 ||214935 ||2650862 ||CESTAT Kolkata |
|3 Central Sales tax ||2008-09 ||4269497 ||1255120 ||3014377 ||Deputy Commissioner of Sales Tax-Thane |
|4 The W.B. Tax on Entry of Goods into Local Areas Act 2012 ||2012-13 to 2013-14 ||6746153 ||- ||6746153 ||West Bengal Taxation Tribunal |
|5 Central Excise Act1944 ||2008-09 ||40249979 ||30858313 ||9391666 ||CESTAT Mumbai |
|6 Central Excise Act1944 ||2008-11 ||8804766 ||- ||8804766 ||CESTAT Kolkata |
|7 Central Excise Act1944 ||2009-11 ||145487 ||- ||145487 ||CESTAT Kolkata |
|8 ESIC ||April 2009 to March 2014 ||1480258 ||776327 ||703931 ||Industrial Court Thane |
|9 Income Tax Act 1961 (TDS) ||Various years per TRACES ||965300 ||- ||965300 ||Rectification With TRACES / Income Tax Department |
|10 Income Tax Act 1961 ||2016-17 ||7096763 ||1420000 1447683 ||4229080 ||CIT -(A)-1 Thane |
|AY 2018-19 Refund Adj. Against AY 2016-17 Dues || || || || || |
Net liability of custom duty and sales tax is exclusive of interest and penalty.
Viii. Company has not defaulted in repayment of loans to banks as at 31st March 2021.
ix. During the year the Company has not raised any Initial Public Offer or furtherpublic offer. The company has obtained term loans for purchase of vehicles amounting toRs.30.46 lakhs (Previous Year Rs.30.00 lakhs). Terms loans were used for the purpose forwhich they were taken.
x. Based upon the audit procedures performed and information and explanations given bythe management we report that we have not come across any instances of fraud by thecompany or any material fraud on the company by its officers or employees that have beennoticed or reported during the year nor have we been informed of such case by management.
xi. Managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V to the CompaniesAct.
xii. The Company is not a Chit Fund Company/or nidhi/ mutual benefit fund/society. Assuch Clause
xii of the order is not applicable to the Company.
xiii. All transactions with related parties are in compliance with Sections 177 and 188of Companies Act 2013 where applicable and the details have been disclosed in the Ind ASfinancial Statement as required by the applicable Accounting Standards.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.
xv. The Company has not entered into non-cash transactions covered by Section 192 ofCompanies Act2013 with directors or persons connected with them.
xvi. The Company is not engaged in the business of non-banking financial institution(NBFI) and not required to obtain a Certificate of Registration (CoR) from Reserve Bank ofIndia in terms of Section 45-IA of the RBI Act 1934.
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 GEE Limited(the Company) as of March 31 2021 in conjunction with our audit of the IND ASfinancial statements of the Company for 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 Reporting(IFCOFR) issued by the Institute of Chartered Accountants of India. 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 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 ethicalrequirements 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgments including the assessment of the risks of materialmisstatement 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 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 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 to the best of our information and according to explanation given to usthe Company has in all material respects an adequate internal financial controls systemover financial reporting and such internal financial controls over financial reportingwere operating effectively as at March 31 2021 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For P. B. SHETTY & CO |
|Chartered Accountants |
|Firm registration number 110102W |
|Brijesh Shetty |
|Membership No. 131490 |
|UDIN: 21131490AAAAEG6561 |
|Place: Thane |
|Date: June 28 2021 |