Gupta Synthetics Ltd.
|BSE: 514116||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE957D01017|
|BSE 16:01 | 19 Mar||Gupta Synthetics Ltd|
|NSE 05:30 | 01 Jan||Gupta Synthetics Ltd|
|BSE: 514116||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE957D01017|
|BSE 16:01 | 19 Mar||Gupta Synthetics Ltd|
|NSE 05:30 | 01 Jan||Gupta Synthetics Ltd|
TO THE MEMBERS OF GUPTA SYNTHETICS LTD.
Report on the Financial Statements
We have audited the accompanying financial statements of Gupta Synthetics Limited("the company") which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of 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 in section 134(5) ofthe Companies Act 2013 ("The Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating 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.
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 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 mis-statement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe 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.
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 the Actin the 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 atMarch'2017 and its loss and cash flow for the year ended on that date subject to pointsmentioned below:
1. Loss of Stock in Fire of ' 2162.93 Lacs of earlier years yet not provided by thecompany as mentioned in the Note No. 40 forming part of balance sheet.
2. The Standard Chartered Bank have written off ' 2029.76 Lacs in the Term Loan Accountduring FY 2013-14. The company have written a letter to the Bank to know the reason forthe said writing off. The company has not received any explanations about the same andtherefore said amount is not written off by the company in its books of account andtherefore the balance outstanding in the name of Standard Chartered Bank is shown higherby that amount ' 2029.76 Lacs and correspondingly the Profit & Loss Account balance inBalance Sheet show the loss figure higher by the amount ' 2029.76 Lacs.
Report on other Legal and Regulatory Requirements
1. 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 appears from our examination of those 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 2014.
e) On the basis of written representations received from the directors as on 31 March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 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 in "Annexture A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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) Rules2014in 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 as referred to in Note No. 7(b) of the Annexure 'B'to the Audit Report and Note No. 43 to the financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses and the Company did not have any long-termcontracts including derivatives contracts for which there were any material foreseeablelosses.
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 disclosure in its financial statements as toholdings as well as dealing in Specified Bank Notes during the period from 8 November 2016to 30 December 2016 and these are in accordance with the books of accounts maintained bythe Company. Refer Note 50 to the financial statements.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrders.
ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' of our report on even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of GuptaSynthetics Ltd. ("the Company") as of March 31 2017 in conjunction with ouraudit 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. 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 judgement 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 to the best of our information and according to the explanations 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 March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT
1. In respect of fixed assets :
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets on the basis of available information.
b. As explained to us the physical verification of the assets has been carried by themanagement at reasonable intervals and no material discrepancies were noticed on suchverification.
c. According to the information and explanation 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.
2. In respect of its inventories :
a. As explained to us inventories have been physically verified by the management atreasonable intervals during the year.
b. In our opinion and according to information and explanations given to us theprocedure of physical verification of inventories followed by the management is reasonableand adequate in relation to the size of the company and nature of its business.
c. In our opinion and according to the information and explanations given to us thecompany has maintained proper record of its inventories and no material discrepanciesnoticed on physical verification.
3. In respect of loans secured or unsecured granted by the company to Companiesfirms or other parties covered in the register maintained under Section 189 of theCompanies Act 2015.
a. The company has granted unsecured loans to company and other parties covered in theregister maintained under Section 189 of the Companies Act.
b. The loan granted by the company is interest free and the principal amount isrepayable on demand and there is no repayment schedule.
4. In our opinion and according to the information and explanations given to us thecompany has complied with the provision of section 185 and 186 of the Act 2013 in respectof grant of loans making investments and providing guarantees and securities.
5. In our opinion and according to the information and explanations given to us thecompany has accepted deposits against the terms of provisions of Section 73 and 76 of theCompanies Act 2013.
6. We have broadly review the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) rules 2014 prescribed by the Central Government underSection 148(1) (d) of the Companies Act 2013 and are of the opinion that prima faciethe prescribed accounts and cost records have been maintained. We have however not madea detailed examination of the cost records with a view to determine whether they areaccurate or complete.
7. In respect of statutory dues:
a. According to the records of the Company undisputed statutory dues includingProvident Fund Income tax Sales tax Custom Duty Excise Duty Cess and other materialstatutory dues have been generally regularly deposited with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of Income tax Sales tax Custom Duty Excise Duty Cess and othermaterial statutory dues as at 31st March 2017 which are outstanding for aperiod of more than six months from the date they become payable except income tax of '30.09 lacs fringe benefit tax of ' 16.33 lacs tax on proposed dividend of ' 5.03 lacsare outstanding exceeding six months.
b. According to the information and explanations given to us and the records producedbefore us the particulars of commercial tax and excise duty and service tax as at 31stMarch 2017 which have not been deposited as on 31st March 2017 on account ofdispute pending are as under:
8. Based on our audit procedures and according to the information and explanationsgiven to us the company has defaulted in repayment of dues towards their Term LoanAccounts with ING Vysya Bank Ltd. Edelweiss Assets Reconstruction Company Ltd. (formerlywith Oriental Bank of Commerce) Industrial Development Bank of India and State Bank ofIndia. Details of period and amount of default are as under:
The amount of default includes principal and interest. Please note that the company hasnot paid any installments and above bank accounts have become Non-Performing Assetstherefore entire term loan accounts are shown as default. Further that the company hasentered into a one time settlement agreement with Kotak Mahindra bank Ltd. and EdelweissAssets Reconstruction Company Ltd. (formerly with Oriental Bank of Commerce). The detailsof one time settlement have been disclosed in note no. 42 of the notes forming part ofaccounts.
9. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable.
10. To the best or our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.
11. In our opinion and according to the information and explanation given to us theCompany has not provided managerial remuneration therefore the requisite approvalsmandated by the provision of Section 197 read with schedule V to the Companies Act2013 isnot require.
12. The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.
13. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.
14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.
15. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or person connected with them and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.
16. The company is not require to be registered under section 45-lA of the Reserve BankOf India Act 1934 .