The Members of
Godha Cabcon & Insulation Limited
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Godha Cabcon & InsulationLimited which comprises the Balance Sheet as at 31st March 2020 and theStatement of Profit and Loss (including other comprehensive income) Statement of Changesin Equity and Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of the significant accounting policies and otherexplanatory information.
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 and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31 March 2020 and profit (including other comprehensiveincome) changes in equity and its cash flows for 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 Statementsections 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 judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate on thesematters. We have determined the matters described below to be the key audit matters to becommunicated in our report.
|S. No. ||Key Audit Matter |
|1. ||Disputed commercial claims |
| ||The company has material disputed commercial claims by customer on account of lower quality of product. |
| ||Refer Note-23 to the Financial Statements |
| ||Auditor's Response |
| ||Principal Audit Procedures |
| ||Obtained details of disputed commercial claims for the year ended March 31 2020 from management. We have involved our experts to review the nature of the amount considered as liability and the likelihood of its payment upon final resolution. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Company's
Annual Report but does not include the financial statements and our auditor's reportthereon.
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 statement our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we required to report that fact. We have nothingto 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 Companies Act 2013 ("the Act") with respect to thepreparation of these financial statements that give a true and fair view of the financialposition financial performance changes in equity and Cash Flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards 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 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 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.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
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 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 Companies Act 2013. We are also responsible for expressing our opinion onwhether the 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 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.
Materiality is the magnitude of misstatements in the financial statement thatindividually or in aggregate makes it probable that the economics decisions of areasonably knowledgeable user of the financial statement 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 statement.
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 ourauditor's 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
As required by Companies (Auditor's Report) Order 2016 ("the Order") issuedby the Central Government of India sub-section (11) of section 143 of the Companies Act2013 we give in the Annexure A a statement on the matters specified in paragraphs 3 and4 of the Order to the extent applicable.
As required by section 143(3) of the Act we report that:
a) We have sought and obtained all the information & explanations which to the bestof our knowledge and belief were necessary for the purpose of 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 the books.
c) The Balance sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2015 as amended.
e) On the basis of written representation 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 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 B".
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirement of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the company to its directors during the year is in accordance withthe provision of section 197 of the Act.
h) 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements Refer Note 23 to the financial statements
b. The Company does nothave any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
c. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For S.K.Khandelwal& Associates
FRN: - 002305C
Annexure-A to the Independent Auditors' Report
The Annexure referred to in Independent Auditor's report to the members of GODHACABCON & INSULATION LIMITED for the year ended 31st March 2020. Wereport that:
I. In respect of the Company's fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Management has confirmed that the Fixed Assets have been physically verified bythem at reasonable time intervals in a phased manner which in our opinion is reasonablehaving regards to size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.
c) According to the information and explanations given to us and on the basis of ourexaminations of the records of the company the title deeds of immovable property are heldin the name of the company.
II. In respect of Company's inventory:
a) Physical verification of the inventory has been done at reasonable intervals by themanagement.
b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
c) The company is maintaining proper records of inventory and there were no materialdiscrepancies noticed on physical verification.
III. According the information and explanations given to us the Company has grantedunsecured loans to one body corporate covered in the register maintained under section189 of the Companies Act 2013 in respect of which:
a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.
b) The schedule of repayment of principal and payment of interest has not beenstipulated; as such repayments or receipts of principal amounts and interest cannot bedetermined.
c) In absence of any stipulation cannot be determined.
IV. In our opinion and according to the information and explanation given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013with respect to loans investments and guarantees given.
V. The company has not accepted any deposits within the meaning of section 73 to 76 ofthe Act from the public. Accordingly the provisions of clause 3(v) of the order are notapplicable to the Company.
VI. The Central Government has not prescribed maintenance of cost records under section148(1) of the Company Act 2013 in respect of the activity carried on by the company.
VII. According to information and explanations given to us in respect of statutorydues:
a) The company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including Provident Fund Investor Education Protection
Fund Employees' State Insurance Income Tax Sales Tax Goods and Service Tax CustomDuty Excise Duty Cess and other material Statutory Dues if any as are applicable toit.
According to the information and explanation given to us no undisputed amounts payablein respect of Income Tax Sales Tax Goods and Service Tax Service Tax Custom DutyExcise Duty Cess and other Statutory Dues were outstanding at the year end for a periodof more than six months from the date they became payable.
(b) According to the information and explanation given to us there are no dues ofSales Tax Income Tax Custom Duty Excise Duty and Cess which have not been deposited onaccount of any dispute.
VIII. In our opinion and according to the information and explanation given to us thecompany has not defaulted in repayment of loans or borrowings to a financial institutionbank Government or dues to debenture holders.
IX. In our opinion and according to the information and explanation given to us thecompany has utilized money raised by way of term loans for the purpose of which they wereraised.
X. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Financial Statements and according to the information and explanationsgiven to us we report that no fraud by the Company or no fraud on the Company by theofficers and employees of the Company has been noticed or reported during the year.
XI. According to the information and explanation given to us and based on ourexamination of records of the company the company has paid/provided for managerialremuneration in accordance with requisite approvals mandated by provisions of section 197read with schedule V to the act.
XII. In our opinion the company is not a NIDHI company. Accordingly paragraph 3 (xii)of the order is not applicable.
XIII. According to the information and explanation given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.
XIV. According to the information and explanation given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
XV. According to the information and explanation given to us and based on ourexamination of the records of the company the company has not entered into any non-cashtransaction with directors or persons connected with him as referred to in section 192 ofCompanies Act 2013.
XVI. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For S.K.Khandelwal& Associates
FRN: - 002305C
Annexure B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of
Section 143 of theCompanies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of GODHACABCON & INSULATION LIMITED as of 31st March 2020 in conjunction withour audit of the financial 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 Reportingissued 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.
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 deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion 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 rethat in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
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 the explanation givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For S.K.Khandelwal& Associates
FRN: - 002305C