TO THE MEMBERS OF GRAUER & WEIL (INDIA) LIMITED Report on the Standalone FinancialStatements
We have audited the accompanying Standalone Financial Statements of GRAUER &WEIL (INDIA) LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2017 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Standalone Financial Statements
The Company's 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 Financial Statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Standalone Financial Statementsbased 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 whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluatingappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Financial Statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 its profit and its cash flows for the year ended on that date.
Emphasis of Matter We draw attention to:
Note No. 27 (M) (i) to the financial statements on non provision for diminution in thevalue of investments in equity shares of an associate whose net worth has fully eroded.For reasons explained in the said note including the associates' business plans &growing prospects such impairment if any is considered to be temporary in nature uponwhich we have placed our reliance and no provision is considered necessary in theaccounts of the Company.
Report on Other Legal and Regulatory Requirements
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 the "Annexure A" - a statement on the matters specified inparagraphs 3 and 4 of the Order.
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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act. (f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B"; and (g) With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us: i. The Company has disclosed the impact ofpending litigations on its financial position in its financial statements ReferNote 27 (A) to the financial statements; ii. The Company has made provision as requiredunder the applicable law or Accounting Standards for material foreseeable losses if anyon long term contracts including derivative contracts. iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company. iv. The Company has provided requisite disclosures in its financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016. Based on audit procedures and relying onthe management representation we report that the disclosures are in accordance with thebooks of accounts maintained by the Company and as produced by the Management.
For M. M. NISSIM & CO.
(Firm's Registration No.107122W)
Membership No. 036490 Place: Mumbai Date: 30th May 2017
"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF GRAUER & WEIL (INDIA) LIMITED
i) In respect of its Fixed Assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets;
b) As explained to us the Assets have been physically verified by the management inaccordance with a phased programme of verification which in our opinion is reasonableconsidering the size and the nature of its business. We are informed that there are nomajor discrepancies as regards plant and machinery and in respect of other assetsdiscrepancies if any will then be dealt with in the accounts once the process ofreconciliation is complete.
c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties are heldin the name of the Company.
ii) The inventory excluding goods-in-transit has been physically verified by themanagement during the year. In our opinion the frequency of verification is reasonable.No material discrepancies were noticed on such physical verification. As regards materialslying with third parties confirmations have been obtained; iii) The Company has notgranted any loans secured or unsecured during the year to companies firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Act. Accordingly the clauses 3(iii) (a) (b) and (c) of the Order are notapplicable to the Company. However in respect of a loan given to an associate company inan earlier year the receipt of interest is regular. There is no stipulation regardingrepayment of principal amount.
iv) The Company has not granted any loan neither made any investments nor given anyguarantee or security during the year covered by the provisions of Sections 185 and 186of the Act.
v) The Company has not accepted any deposit from public during the year. In our opinionand according to the information and explanations given to us the Company has compliedwith the provisions of Section 74 of the Act read with relevant rules there under withregard to repayment of the deposits accepted before the commencement of the Act. We areinformed by the management that no order has been passed by the Company Law Board orNational Company Law Tribunal or Reserve Bank of India or any court or any other Tribunalon the Company. vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148 (1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. vii)
a) The Company is regular in depositing undisputed statutory dues including ProvidentFund Employees' State Insurance Income Tax Sales-Tax Service Tax Duty of CustomsDuty of Excise Value Added Tax Cess and any other statutory dues with appropriateauthorities where applicable. According to the information and explanations given to usthere are no undisputed amounts payable in respect of such statutory dues which haveremained outstanding as at 31st March 2017 for a period of more than six months from thedate they became payable.
b) According to the records of the Company the dues outstanding of Income-TaxSales-Tax Service Tax Duty of Customs Duty of Excise and Value Added Tax on account ofany dispute are as follows:
|Particulars ||Period to which the amount related ||Forum where the dispute is pending ||Amount |
| || || ||(Rs. In Lacs) |
|Income Tax ||2004-05 ||Income Tax Appellant Tribunal ||9.68 |
| ||2011-12 ||Commissioner of Income Tax (Appeals) ||14.56 |
| ||1996-97 to 2001-02 ||Commissioner of Excise & Customs (Appeals) ||12.94 |
|Excise Duty ||2009-10 to 2013-14 ||Commissioner of Excise & Customs (Appeals) Chandigarh ||19.33 |
| ||1990-91 1993-94 1996-97 1997-98 1998-99 1999-2000 and 2000-01 ||Deputy/Assistant Commissioner ||11.72 |
| ||2006-2012 and 2011-2016 ||Commissioner of Excise & Customs (Appeals) ||231.36 |
|Service Tax ||2003-04 to 2010-11 2011-12 to 2013-14 ||Commissioner of Service Tax (Appeals) ||211.53 |
|Sales Tax ||1998-99 and 2011-12 ||Joint/Deputy Commissioner (Appeals) ||17.65 |
| ||2012-2013 || ||53.60 |
viii) The Company has not defaulted in repayment of its loans or borrowings to banks.The Company does not have any borrowings by way of debentures.
ix) The Company has not raised any moneys by way of Initial public offer or furtherPublic offer (Including debt instruments). Moneys raised by way of Term Loan were appliedfor the purpose for which those are raised.
x) On the basis of our examination and according to the information and explanationsgiven to us no fraud by the Company or any material fraud on the Company by its officersor employees has been noticed or reported during the year.
xi) The managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act. xii)The Company is not a nidhi Company and accordingly provisions of clause (xii) of Para 3 ofthe order are not applicable to the Company.
xiii) On the basis of our examination and according to the information and explanationsgiven to us we report that all the transaction with the related parties are in compliancewith Section 177 and 188 of the Act and the details have been disclosed in the Financialstatements in Note no.27(Q) as required by the applicable accounting standards.
xiv) The Company has not made any preferential allotment or private placement of shareor fully or partly convertible debentures during the year and accordingly provisions ofclause (xiv) of Para 3 of the Order are not applicable to the Company.
xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly provisions ofclause (xv) of Para 3 of the Order are not applicable to the Company. xvi) The Company isnot required to be registered under section 45-IA of the Reserve Bank of India Act 1934and accordingly provisions of clause (xvi) of Para 3 of the Order are not applicable tothe Company.
For M. M. NISSIM & CO.
(Firm's Registration No.107122W)
Membership No. 036490
Date: 30th May 2017
"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF GRAUER & WEIL (INDIA) LIMITED
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 GRAUER& WEIL (INDIA) LIMITED ("the Company") as of March 31 2017 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating 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 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 Institute ofChartered accountants of India and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by TheInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 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 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 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 issued by TheInstitute of Chartered Accountants of India.
For M. M. NISSIM & CO.
(Firm's Registration No.107122W)
Membership No. 036490 Place: Mumbai Date: 30th May 2017