To the Members of
GOPAL IRON & STEEL CO. (GUJARAT) LTD
Report on the Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of Gopal Iron& Steel Co. (Gujarat) Limited (the Company) which comprise the BalanceSheet as at March 31 2017 the Statement of Profit and Loss the Statement of Cash Flowand the Statement of changes in equity for the year ended and a summary of significantaccounting policies and other explanatory information (herein after referred to as"standalone Ind AS financial statements"). -
Managements Responsibility for the Standalone Ind AS financial statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act) with respect to the preparation ofthese Standalone Ind AS ' financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified underSection 133 of the Act read with relevant rules issued there under. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding 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 standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherstandalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Companys preparation of the standalone Ind AS financial statementsthat give a true and fair view in order to design audit procedures that are appropriatein the-. circumstance.
An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Companys Directorsas well as evaluating the overall presentation of the standalone Ind AS financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2017 and its Loss and its Cash Flow for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2017 (theOrder) as amended issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the "Annexure A astatement on the matters specified in paragraphs 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 purpose 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 and the Statement of Cash Flowsand the statement of changes in equity dealt with by this Report are in agreement with thebooks of account;
d. in our opinion the aforesaid standalone Ind AS financial statements comply with theAccounting Standards specified linder section 133 of the Act read with relevant ruleissued thereunder;
e. On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.
f. with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report report in Annexure B";
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 standalone Ind AS financial statements
ii. the Company did not have any long term contract including derivative contracts forwhich there were any material foreseeable losses. '
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and
iv. the Company has provided requisite disclosures in its standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2017 to 30 December 2017 and these are in accordance with the books ofaccounts maintained by the Company. Refer Note 31 to the consolidated Ind AS financialstatements.
| ||For Mehul Kanani & Co. |
| ||Mehaul Kanani |
| ||Proprietor |
|Place: Surat ||Membership Number: 138121 |
|Date: 30/05/2017 || |
Annexure A to the Independent Auditors Report
Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement of our report of even date'to the financial statements of theCompany for the year ended March 31 2017:
1) (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 in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and no material discrepancies between the booksrecords and the physical fixed assets have been noticed.
(c) The title deeds of immovable properties are held in the name of the company.
2) (a) The management has conducted the physical verification of inventory atreasonable intervals.
b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly deait with in the books of account were notmaterial.
3) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectof loans investments guarantees and security.
5) The Company has not accepted any deposits from the public.
6) As informed to us the company is not required to maintain cost record as prescribedby the Central Government under sub-section (1) of Section 148 of the Act.
7) a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities exceptProvident Fund Aggregating Rs. 3398634/-.
b) Gujarat Commercial Tax Department have raised a demand of Rs. 50.65 Lacs for thefinancial year 2002-2003 and the financial year 2009-2010 which has been disputed by theCompany as it is of the opinion that the same shall be quashed in the appeal preferred bythe company. Hence no provision for this disputed Sales Tax demand has been made. CentralExcise Authorities have raised demand aggregating Rs. 33.53 Lacs (Rs. 33.53 Lacs) for thefinancial year 1998-1999 and 1999-2000 which has been disputed by the Company as it is ofthe opinion that the same shall be quashed in the appeal preferred by the company. Howevercompany has paid under protest Rs. 36.24 Lacs (Rs. Nil) and shown as an asset under thehead of "Short Term Loans and Advances".Income tax department have raised ademand of Rs. 3253104 for the financial year 1996-97Rs. 20356631 for the financialyear 1997-98 Rs. 156570 for the financial year 2008-09 Rs. 235920 for thefinancial year 2009-10 Rs 74750 for the financial year 2010-11 and Rs. 676210 for thefinancial year which has been disputed by the company as it is of the opinion that thesame shall be quashed in the appeal preferred by the company at appropriate authority.>
8) Based on our review conducted as above The Punjab National Bank had declared theLoan Account as NPA for the loans given to the company and for the same company had madeprovision for interest to be payable to the Bank.
9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in thestandalone Ind AS financial Statements as required by the applicable accounting standards.
14) According to the information and explanations given by the management and Basedupon the audit procedures performed and the information and explanations given by themanagement the company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of clause 3 (xiv) of the Order are not applicable to theCompany and hence not commented upon.
15) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3(xv) ofthe Order are not applicable to the Company and hence not commented upon.
16) In our opinion the Company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act1934 and accordingly the provisions of clause 3(xvi) of theOrder are not applicable to the company and hence not commented upon.
| ||For Mehul Kanani & Co. |
| ||Mehul Kanani |
| ||Proprietor |
| ||'Membership Number: 138121 |
|Place: Surat - || |
|Date: 30/05/2017 || |
Annexure B to the Independent Auditors
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 Gopal Iron& Steel Co. (Gujarat) Limited (the Company) as of March 31 2017 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 the internal controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over * financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the Guidance Note) and the Standards'on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 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 auditors judgments including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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; the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 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 Mehul Kanani & Co. |
| ||Mehul Kanani |
| ||Proprietor |
| ||Membership Number :138121 |
|Place: Surat || |
|Date: 30/05/2017 || |