Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of GKW Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and a summaryof significant accounting policies and other explanatory information (hereinafter referredto as " financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in Indiaof thestate of affairs of the Company as at 31st March 2019 its profit includingother comprehensive income changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act ('SAs'). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined that there are no key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Report on Corporate Governance but does not include thefinancial statements and our auditor's report thereon which we obtained prior to the dateof this auditor's report and the Directors' Report including Annexures to Directors'Report which are expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information and we donot and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above and in doing so consider whether the otherinformation is materially inconsistent with the financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed on the other information that we obtained priorto the date of this auditor's report we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
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 sub-section (11) of Section 143 ofthe Act we give in "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.
(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 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 Indian AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
e. On the basis of the written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2";
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 financial statements - Refer Note No. 27 to the financial statements;
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
(3) As required by Section 197(16) of the Act we report that in our opinion and to thebest of our information and according to the explanations given to us the remunerationpaid by the Company to its directors during the year is in accordance with the provisionsof Section 197 of the Act. Further the remuneration paid by the Company to its ManagingDirector during the year is in excess of the limits laid down under sub-section (3) ofSection 197 of the Act and the requisite approval in accordance with the said Section readwith Schedule V to the Act has been obtained by the Company - refer Note No. 34(d) to thefinancial statements.
For Haribhakti& Co. LLP
ICAI Firm Registration No. 103523W/W100048
Anand Kumar Jhunjhunwala
Membership No. 056613
20th May 2019
ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph (1) under Report on Other Legal and RegulatoryRequirements' in our Independent Auditor's Report of even date to the members of theCompany on the financial statements for the year ended 31st March 2019]
(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) According to the information and explanations given to us major portion of fixedassets have been physically verified by the Company's Management (the"management") during the year and no material discrepancies were noticed on suchverification. In our opinion the frequency of physical verification is reasonable havingregard to the size of the Company and the nature of its fixed assets.
(c) According to the information explanations and representations provided to us bythe management the title deeds of immovable properties recorded as fixed assets in thebooks of account of the Company are held in the name of the Company.
(ii) The Company does not have any inventory and hence reporting under Clause 3(ii) ofthe Order is not applicable to the Company.
(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms limited liability partnerships or other parties covered inthe register maintained under Section 189 of the Act.
(iv) According to the information and explanations given to us in respect of loansinvestments guarantees and security the Company has complied with the provisions ofSections 185 and 186 of the Act wherever applicable.
(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public.
(vi) According to the information and explanations given to us the maintenance of costrecords under Section 148(1) of the Act has not been specified and accordingly theprovisions of Clause 3(vi) of the Order are not applicable to the Company.
(vii) (a) According to the records of the Company amounts deducted/accrued in thebooks of account in respect of undisputed statutory dues including provident fundemployees' state insurance income-tax sales tax service tax duty of customs duty ofexcise value added tax goods and services tax cess and any other material statutorydues have generally been regularly deposited with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were in arrears as at 31st March 2019for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us the dues as at 31stMarch 2019 of income tax sales tax service tax duty of customs duty of excise valueadded tax and goods and services tax which have not been deposited on account of anydispute are as follows :
|Name of the Statute ||Nature of dues ||Amount (Rs. in Lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|Central Excise Act 1944 ||Excise Duty ||52.83 ||1995-1998 ||Commissioner of Central Excise (Appeals) |
|Central Excise Act 1944 ||Excise Duty ||82.55 ||1994-1997 ||Commissioner of Central Excise |
|Customs Act 1962 ||Customs Duty ||9.37 ||1981 ||Calcutta High Court |
|Income Tax Act 1961 ||Income Tax ||221.35 ||Assessment Year 2016-17 ||Commissioner of Income Tax (Appeals) |
(viii) According to the information and explanations given to us during the year theCompany has not taken any loans or borrowings from financial institutions banksgovernment or debenture holders and accordingly reporting under Clause 3(viii) of theOrder is not applicable to the Company.
(ix) During the year the Company has not raised monies by way of public offer(including debt instruments) or term loans and accordingly reporting under Clause 3(ix)of the Order is not applicable to the Company.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given tous by the management we report that we have neither come across any instance of fraud bythe Company or on the Company by its officers or employees noticed or reported during theyear nor have we been informed of any such case by the management.
(xi) According to the information and explanations given to us managerial remunerationhas been paid/provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company.
(xiii) According to the information and explanations given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 ofthe Act where applicable and the details have been disclosed in the financialstatements as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year.
(xiv) As per the information and explanations given to us the Company has not enteredinto any non-cash transactions during the year with directors or persons connected withthem.
(xvi) Based on expert opinion and legal opinion obtained by it the Company hasinformed and explained that it is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.
For Haribhakti & Co. LLP
ICAI Firm Registration No. 103523W/W100048
Anand Kumar Jhunjhunwala
Membership No. 056613
20th May 2019
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph (2)f under Report on Other Legal and RegulatoryRequirements' in our Independent Auditor's Report of even date to the members of theCompany on the financial statements for the year ended 31stMarch 2019] Reporton the Internal Financial Controls with reference to Financial Statements under Clause (i)of sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls with reference to financial statementsof the Company as of 31st March 2019 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wereestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 withreference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company;(2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to FinancialStatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at 31 stMarch2019 based on the internal control with reference to financial statements criteriaestablished by the Company considering the essential components of internal controlstated in the Guidance Note issued by the ICAI.
For Haribhakti& Co. LLP
ICAI Firm Registration No. 103523W/W100048
Anand Kumar Jhunjhunwala
Membership No. 056613
20th May 2019.