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Generic Engineering Construction & Projects Ltd.

BSE: 539407 Sector: Infrastructure
NSE: GENCON ISIN Code: INE854S01022
BSE 00:00 | 23 Sep 31.70 -0.80
(-2.46%)
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32.20

HIGH

32.30

LOW

31.35

NSE 00:00 | 23 Sep 31.70 -0.85
(-2.61%)
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32.65

HIGH

32.65

LOW

31.05

OPEN 32.20
PREVIOUS CLOSE 32.50
VOLUME 1291
52-Week high 51.00
52-Week low 27.00
P/E 9.22
Mkt Cap.(Rs cr) 134
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 32.20
CLOSE 32.50
VOLUME 1291
52-Week high 51.00
52-Week low 27.00
P/E 9.22
Mkt Cap.(Rs cr) 134
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Generic Engineering Construction & Projects Ltd. (GENCON) - Auditors Report

Company auditors report

To

The Members of GENERIC ENGINEERING CONSTRUCTION AND PROJECTS LIMITED Report on theaudit of the financial statements Opinion

1. We have audited the accompanying financial statements of Generic EngineeringConstruction and Project Limited ("the Company") which comprise the balancesheet as at March 31 2021 and the Statement of Profit and Loss (including OtherComprehensive Income) Statement of changes in Equity and statement of cash flows for theyear the ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information. (hereinafter referred to as‘financial statement').

2. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act2013 (‘Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (‘Ind AS') specified under section 133 of the Act of thestate of affairs of the Company as at March 31 2021 its profit changes in equity andcash flows for the year ended on that date.

Basis for opinion

3. We conducted our audit in accordance with the standards on auditing specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the auditor's responsibilities for the audit of thefinancial statements section of our report. We are independent of the Company inaccordance with the code of ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and thecode of ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Emphasis of Matter

4. We draw attention to Note No.35 to the Financial Results regardinguncertainties associated with the COVID-19 pandemic and impact assessment made by thecompany on the financial results. As mentioned in the said note based on the futureeconomic conditions the actual impact may not be in line with the current estimates asmade by the company although the current impact assessment does not indicate any adverseimpact on the ability of the company to continue as a going concern. Our opinion on thefinancial results is not modified in respect of this matter.

Key Audit Matters

5. Key audit matters are those matters that in our professional judgment wereof most 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.

6. We have determined the matter described below to be the key audit matters tobe communicated in our report.

Key audit matter How our audit addressed the key audit matter
Revenue Recognition
The company recognizes revenue based on the stage of completion which is determined on the basis of proportion of value of goods or services transferred with reference to the certificates given by the Our audit procedures on adoption of Ind AS 115 Revenue from Contracts with Customers (‘Ind AS 115') include:
Clients / Consultants appointed by Clients as well as on the billing schedule agreed with them for the value of work done during the year. Evaluated the appropriateness of the Company's revenue recognition policies;
Assessed the design and implementation of key controls over the recognition of contract revenue and margins and tested the operating effectiveness of these controls;
For a sample of contracts tested the appropriateness of amount recognized by:
• reviewing the contract terms and conditions
• evaluating the identification of performance obligation
• evaluating the appropriateness of management's assessment that performance obligation was satisfied over time and consequent recognition of revenue
• reviewed legal and contracting certificate received from client/ consultants appointed by clients
• Assessed that the disclosures made by the management are in accordance with the applicable accounting standard

Information other than the financial statements and auditors' report thereon

7. The Company's Board of Directors is responsible for the other information.The other information comprises the information included in the Annual report but doesnot include the Financial Statements and our auditors' 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 such 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.

Responsibilities Management for the financial statements

8. The accompanying financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors is 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 financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the Ind AS specifiedunder section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

9. In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

10. The board of directors are also responsible for overseeing the Company's financialreporting process.

Auditor's responsibilities for the audit of the financial statements

11. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole is free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.

12. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls with reference to financialstatements in place and the 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 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.

13. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

14. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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

Other Matter

16. The financial statements of the Company for the year ended 31 March 2020 wereaudited by the predecessor auditor SDA & Associates who have expressed an unmodifiedopinion on those standalone financial statements vide their audit report dated 28th July2020

Report on other legal and regulatory requirements

17. The Company has provided (and)/paid managerial remuneration which is not inaccordance with the requisite approval mandated by the provisions of Section 197 of theAct read with Schedule V to the Act. The details of the same are as follows:

S No. Payment made to Amount Paid/ provided in excess of limits prescribed Amount due for Recovery as at 31 March 20XX Steps taken to secure the recovery of the amount Remarks (if any)
1 Managing Director 3640911 NA NA Based on representation given by management Special resolution to waive off the recovery of excess remuneration would be taken in 27th AGM dated 29th September 2021 u/s 197(10)
2 Executive Directors 5097276 NA NA

18. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure "A" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

19. Further to our comments in Annexure A as required by section 143(3) of the Actbased on our audit we report to the extent applicable 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 financial statements dealt with by this report are in agreement with the booksof account;

(d) In our opinion the aforesaid financial statements comply with the accountingstandards specified under section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the board of directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) We have also audited the internal financial controls with reference to financialstatements of the Company as on 31 March 2021 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date and our report as per"Annexure B" expressed unmodified opinion; and

(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;

a. The Company does not have any pending litigations which would impact its financialposition as at 31 March 2021;

b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2021; and

c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company

d. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these financial statements.

Hence reporting under this clause is not applicable.

For Bilimoria Mehta & Co.
Chartered Accountants
Firm Reg. No. 101490W
SD/-
Prakash Mehta
Partner
Place of Signature: Mumbai Membership no. 030382
Date: 30th June 2021 UDIN: 21030382AAAACI8407

Annexure - A to the Auditors' Report

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation 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:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies were noticed on such verification. In our opinion thefrequency of verification of the fixed assets is reasonable having regard to the size ofthe Company and the nature of its assets.

(c) According to the information and explanations given to us the title deeds ofimmovable properties included in property plant and equipment are held in the name of theCompany.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification/ material discrepanciesnoticed on physical verification have been properly dealt with in the books of account.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.

(iv) According to the information and explanations given to us the Company has notmade any loans which require compliance with the provisions of section 185. However theCompany has complied with the provisions of s.186 of the Act with respect to loans andinvestments made.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products/services andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. However we have not made a detailed examination of the cost records witha view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanation given to us wealth tax duty ofcustoms duty of excise are not applicable to the company. Undisputed statutory duesincluding provident fund employees' state insurance income-tax sales-tax service taxvalue added tax cess and other material statutory dues as applicable have not beenregularly deposited to the appropriate authorities and there have been significant delaysin a large number of cases. Undisputed amounts payable in respect thereof which wereoutstanding at the year-end for a period of more than six months from the date they becamepayable are as follows:

Statement of arrears of statutory dues outstanding for more than six months

Name of the statute Nature of the dues Amount Period to which the amount relates Due Date Date of Payment Remarks if any
Income Tax Act 1961 TDS 2237027 April 2020 to September 2020 May 2020 to October 2020 8th &27th April 2021 and 16th & 21th June NA

(b) According to the information and explanation given to us there no dues of incometax or sales-tax or duty of customs or duty of excise or value added tax which have notbeen deposited with the appropriate authorities on account of any dispute as on 31.3.2021other than as stated below:

Name of the statute Nature of the dues (Including interest and penalty as the case may be) Amount in Lakhs) Period to which the amount relates Forum where Dispute is pending
Central Goods & service tax Act 2017 Goods and Service tax Interest & Penalty 24.12 Transitional Credit (Trans-I) Commissioner of Central (Appeals)
Income Tax Tax Interest 194.11 AY 2018-19 Income Tax (Appeal)

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution or government during the year. The Company did not have anyoutstanding debentures during the year.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments) and did not have any term loans outstanding during theyear. Accordingly the provisions of clause 3(ix) of the Order are not applicable.

(x) 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.

(xi) The Company has provided (and)/paid managerial remuneration which is not inaccordance with the requisite approval mandated by the provisions of Section 197 of theAct read with Schedule V to the Act. The details of the same are as follows:

S No. Payment made to Amount Paid/ provided in excess of limits prescribed Amount due for Recovery as at 31 March 2021 Steps taken to secure the recovery of the amount Remarks (if any)
1 Managing Director 3640911 NA NA Based on representation given by management Special resolution to waive off the recovery of excess remuneration would be taken in 27th AGM dated 29th September 2021 u/s 197(10)
2 Executive Directors 5097276 NA NA

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

(xiv) During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

(xv) In our opinion the company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.

(xvi) The Company is not required to be registered under section 45 -IA of the ReserveBank of India Act 1934.

For Bilimoria Mehta & Co.
Chartered Accountants
Firm Reg. No. 101490W
SD/-
Prakash Mehta
Partner
Place of Signature: Mumbai Membership no. 030382
Date: 30th June 2021 UDIN: 21030382AAAACI8407

Annexure - B to the Auditors' Report

Independent Auditor's Report on the internal financial controls with reference to thefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (‘the Act')

1. We have audited the internal financial controls over financial reporting ofGENERIC ENGINEERING CONSTRUCTION AND PROJECTS LTD ("the Company") as of 31 March2021 in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements

3. Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Standards on Auditing issued by the Institute ofChartered Accountants of India (‘ICAI') prescribed under Section 143(10) of the Actto the extent applicable to an audit of internal financial controls with reference tofinancial statements and the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (‘the Guidance Note') issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements were established and maintained and if suchcontrols operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness.

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 judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting 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 those 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

7. Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequateinternal financial control system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2021 based onthe 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.

For Bilimoria Mehta & Co.
Chartered Accountants
Firm Reg. No. 101490W
SD/-
Prakash Mehta
Partner
Membership no. 030382
UDIN: 21030382AAAACI8407
Place of Signature: Mumbai
Date: 30th June 2021

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