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Gujarat Wedge Wire Screens Ltd.

BSE: 513129 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE090J01014
BSE 05:30 | 01 Jan Gujarat Wedge Wire Screens Ltd
NSE 05:30 | 01 Jan Gujarat Wedge Wire Screens Ltd

Gujarat Wedge Wire Screens Ltd. (GUJWEDGEWIRE) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

GUJARAT WEDGE WIRE SCREENS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of GUJARAT WEDGE WIRE SCREENSLIMITED ("the Company") which comprise the Balance Sheet as at 31/03/2017 theStatement of Profit and Loss the cash flow statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the 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 financial statements that give a true and fair view of the financial position financial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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 thereunder.

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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of 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 financial statements.

Basis for Qualified Opinion

The Company has not made provision in respect of doubtful debts of 64.02 lacs in thebooks of accounts. Thus loss has been understated and assets have been overstated to thatextent.

Further the company is liable to carry out internal audit however no internal audit iscarried on since 30.09.2016.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in Basis for Qualified Opinionparagraph the aforesaid financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the company as at 31stMarch 2017 and its losses and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order2016("the Order")issued by the Central Government of India in terms of sub section (11) of section 143 ofthe Companies Act 2013. We give in the Annexure A statements on the matters specified inparagraphs 3 and 4 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 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 and the cash flowstatement dealt with 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 2014.

(e) On the basis of the written representations received from the directors as on31/03/2017 taken on record by the Board of Directors none of the directors isdisqualified as 31/03/2017 from being appointed as a director in terms of Section 164 (2)of the Act.

(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 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 financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

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

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management.

FOR Shah Sanghvi & Co.

(Chartered Accountants)

Reg No.: 109794W

JITESH P. SHAH

(Proprietor)

Membership No : 034010

Date : 30/05/2017

Place : Vadodara

"Annexure B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of GUJARAT WEDGE WIRE SCREENS LIMITED Company 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 GUJARATWEDGE WIRE SCREENS LIMITED Company Limited

("The Company") as of March 31 2017 in conjunction with our audit of thestandalone 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. 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.

Auditors' Responsibility

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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 amout the adequacy ofthe internal financial control system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reportingassessing the risk that a material weakness exists and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend upon on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial 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 qualified audit opinion on the Company's internal financialcontrols system 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. InherentLimitations 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been indentified as at 31.03.2017:

a) The company did not have an appropriate internal control system for customeracceptance credit evaluation and establishing customer credit limits for sales whichcould potentially result in the company recognising revenue without establishingreasonable certainty of ultimate collection.

b) The company did not have an appropriate internal control system for inventory withregard to receipts issue for production and physical verification. Further the internalcontrol system for identification and allocation of overheads to inventory was also notadequate. These could potentially result in material misstatements in the company's tradepayables consumption inventory and expense account balances.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatements of the company's annual financial statements will not beprevented or detected on a timely basis.

In our opinion except for the effects/ possible effects of the material weaknessdescribed above on the achievement of the objectives of the control criteria the companyhas maintained in all material respects adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2017 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issues by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of 31.03.2017 and thesematerial weaknesses does not affect our opinion on the standalone financial statements ofthe company.

FOR Shah Sanghvi & Co.

(Chartered Accountants)

Reg No.: 109794W

JITESH P. SHAH

(Proprietor)

Membership No : 034010

Date : 30/05/2017

Place : Vadodara

Annexure to the Independent Auditors' Report

(Referred to in above the auditor's report of even date to the members of Gujarat WedgeWires Screen Ltd. on the financial statements for the year ended 31.03.2017)

i. (a) The company has the basic records showing full particulars includingquantitative details and situation of Fixed Assets. However these records need to beorganized so as to identify all costs with individual assets and also show the locationand work out written down value of each item.

(b) Fixed assets have not been physically verified by the management at reasonableintervals; Hence material discrepancies if any were not verified.

(c) In our opinion and according to the information and explanation given to us thetitle deeds of immovable properties are held in the name of the company.

ii. Inventory has been physically verified by the management at reasonable intervalsduring the year however report of such physical verification was not made available forverification.

iii. According to the information and explanation given to us the company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in register maintained u/s 189 of the Act.

In view of the above provisions of clause 3 (iii) (a) (b) and (c) are not applicableto the company.

iv. In our opinion and according to information and explanations given to us thecompany has in respect of loans investments guarantees and security provisionscomplied with section 185 and section 186 of the Companies Act 2013.

v. According to the information and explanation given to us the company has notaccepted any deposits. Hence the provisions of clause 3(v) are not applicable to thecompany.

vi. We have broadly reviewed the books of accounts maintained by the company pursuantto the rules made by the Central Government of India. The maintenance of cost records hasbeen prescribed u/ s 148(1) of the Act and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. According to the books and records as produced and examined by us in accordancewith Generally Accepted Auditing Practices in India and also management representationsundisputed statutory dues in respect of Provident fund Employees' state insurance Incometax Sales tax Service tax Custom duty Excise duty Value Added Tax Cess and othermaterial statutory dues applicable to it has not been regularly deposited withappropriate authorities.

According to the records of the company there are no amounts which have not beendeposited on account of any dispute in respect of income tax or sales tax or ervice tax orduty of customs or duty of excise or value added tax.

viii. In our opinion and according to the information and explanation given to us andthe books of accounts verified by us the company has not defaulted in repayment of duesto financial institution bank Government or dues to debenture holders.

ix. As per information given to us no money was raised by way of initial public offeror further public offer (including debt instruments). No term loans are raised by thecompany during the year.

x. During the course of our examination of books of accounts carried in accordance withthe Generally Accepted Auditing Standards in India we have neither come across anyinstance of fraud on or by the company either noticed or reported during the year norhave we been informed of such case by the management.

xi. According to information and explanation given to us and the books of accountsverified by us the managerial remuneration has been paid or provided in compliance withSection 197 read with Schedule V to the Companies Act 2013.

xii. The company is not a Nidhi company hence the provisions of clause 3(xii) are notapplicable to the company.

xiii. All transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements etc. as required by the applicable accounting standards.

xiv. According to information and explanation given to us and the books of accountsverified by us the company during the year has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures hence the provisionof clause 3(xiv) are not applicabe to companies.

xv. According to information and explanation given to us and the books of accountsverified by us the company has not entered into any non cash transaction with directors orpersons connected with it.

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

FOR Shah Sanghvi & Co.

(Chartered Accountants)

Reg No.: 109794W

JITESH P. SHAH

(Proprietor)

Membership No : 034010

Date : 30/05/2017

Place : Vadodara