To the members of Gwalior Polypipes Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Gwalior Polypipes Limited(the "Company") which comprise the Balance Sheet as at March 31 2015Statement of Profit and Loss and Cash Flow Statement for the year ended on that date anda summary of significant -tion which we have signed under reference to this report.
Managements Responsibility for the Financial Statements
2. The Companys Board of Directors is responsible for the matters stated inSection 134(5) of the Companies
Act 2013 ("the Act") with respect to the preparation of these financialstatements that give a true and fair view of the financialpositionandfinancialperformanceof the Company in accordance with the accounting prin -ciples generally accepted in IndiaIncluding the Accounting Standards specified under Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2014. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these financial statements based onour audit.
4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting standards and matters which are required to be included in theaudit report.
5. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act and other applicable pronouncements issued by the Institute ofChartered Accountants of India. 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.
6. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financialstatements whether due to fraud or error. In making those risk assessmentsthe auditors consider internal control relevant to the entitys preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion on theeffectiveness of the entitys internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Management as well as evaluating the overall presentation of thefinancial statements. 7. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion.
8. In our opinion and to the best of our information and according to the explanationsgiven to us the accompanying financialstatements 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 at 31 March2015 and its loss and its cash flows for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditors Report) Order 2015 issuedby the Central Government of India in terms of sub-section (11) of section 143 of the Act(hereinafter referred to as the "Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us in our opinion the said order is applicable tothis Company. 10. 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 Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
(d) in our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement dealt with by this report comply with the Accounting Standards notified underSection 133 2013 read with Rule 7 of the Companies (Accounts) Rules2014;
(e) on the basis of written representations received from the directors as on March 312015 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2015 from being appointed as a director in terms of of sub-section (2) ofsection 164 of the Act.
(f) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:
i. The company has disclosed the impact of the pending litigation as at 31st March2015 on its financial position in its financial statements Refer Note 3.1 3.2 3.4 &3.5. ii. The company has not entered in any long term contracts including derivativecontracts as at 31st March 2015. iii. There were no amounts which were required to betransferred to the Investor Education and Protection Fund by the Company during the yearended March 31 2015.
| ||For SNMG & Co. |
| ||Chartered Accountants |
| ||FRN0.04921N |
|Place: New Delhi ||(Rakesh Kumar) |
|Dated:05.09.2015 ||Partner |
| ||M. No. 083911 |
Annexure to Independent Auditors Report
Referred to in paragraph 9 of the Independent Auditors Report of even date to themembers of Gwalior Polypipes
Limited on the financial statements as of and for the year ended March 31 2015 i. (a)The Company is not maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets of the Company have been physically verified by the Managementduring the year and no material discrepancies have been noticed on such verification. Inour opinion the frequency of verification is reasonable.
ii. (a) As per the information furnished the inventories have been physicallyverifiedduring the year by the management at reasonable intervals.
(b) According to the information and explanations given to us procedures of physicalverification of inventories followed by the management are reasonable and adequate inrelation to the size of the company and the nature of its business.
(c) The company is maintaining proper records of inventory. In our opiniondiscrepancies noticed on physical verification of inventories were not material inrelation to the operations of the Company and the same have been properly dealt with inbooks of account.
iii. The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under Section 189 of the Act.Therefore the provisions of Clause 3(iii) (iii)(a) and (iii)(b) of the said Order arenot applicable to the Company.
iv. In our opinion and according to the information and explanations given to usthere is an adequate internal control system commensurate with the size of the Company andthe nature of its business for the purchase of fixed assets and for the sale of services.Further on the basis of our examination of the books and records of the Company andaccording to the information and explanations given to us we have neither come acrossnor have been informed of any continuing failure to correct major weaknesses in theaforesaid internal control system.
v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and
76 of the Act and the rules framed there under to the extent notified.
vi. The Central Government of India has not specified the maintenance of cost recordsunder subsection (1) of Section 148 of the Act for any of the products of the Company.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company has not yet deposited undisputedstatutory dues on account of sales tax central sales tax entry tax VAT with theappropriate authorities. Though there has been a slight delay in a few cases.
According to the information and explanations given to us the details of undisputedstatutory dues in arrears as at 31.03.2015 for a period of more than 6 months from thedate they became payable are as follows:-
|S.No. ||Name of the statute ||Nature of the dues ||Amount |
|1. ||MP Sales Tax Act ||Entry Tax ||Rs. 428908 |
|2. ||Central Sales Tax Act (MP) ||Central Sales Tax ||Rs. 441610 |
|3. ||Central Sales Tax Act (Raj.) ||Central Sales Tax ||Rs. 473738 |
|4. ||MP Sales Tax Act ||Sales Tax ||Rs. 818544 |
According to the information and explanations given to us and the records of theCompany examined by us the details of disputed statutory dues in arrears as at31.03.2015 are as follows :
|S.No. ||Name of the statute ||Nature of the dues ||Amount ||Forum where the dispute is pending |
|1. ||MP Sales Tax Act ||Sales Tax ||Rs. 2900394 ||Under Appeal before High Court Gwalior |
|2. ||MP Sales Tax Act ||Deferred Sales Tax ||Rs. 6154725 ||Under Appeal before High Court Gwalior |
(c) There are no amounts required to be transferred by the Company to the InvestorEducation and Protection Fund in accordance with the provisions of the Companies Act 1956and the rules made thereunder.
viii. Accumulated losses of the Company as on 31.03.2015 are Rs. 94058292. TheCompany has incurred cash losses during the current financial year are Rs. 3213920 asagainst the cash loss of Rs. 2193777 during the last year. The company was declared as asick industrial company in terms of Section 3(1)(o) of Sick Industrial Companies (SpecialProvisions) Act 1985 vide BIFR order dated 9th September 2009 and IFCI was appointed asthe operating agency for formulating the scheme of rehabilitation.
ix. The Company had enjoyed cash credit facility from State Bank of India which wasrecalled and the bank filed a suit before the Debt Recovery Tribunal in 2003.Subsequently the said loan was assigned to Kotak Mahi-ndra Bank Limited (KMBL) pursuantto the execution of a deed of assignment on January 16 2006. KMBL had issued a noticedated July 6 2007 to the company u/s 13(2) of SARFAESI Act 2002. The Company has alsofiled an application before the Debt Recovery Tribunal against the symbolic possession ofassets taken by
KMBL u/s 13(4) of SARFESAI ACT 2002 on 28th /29th November 2011.
x. In our opinion and according to the information and explanations given to us theCompany has not given any guarantee for loans taken by others from banks or financialinstitutions during the year. Accordingly the provisions of Clause 3(x) of the Order arenot applicable to the Company.
xi. The Company has not raised any term loans. Accordingly the provisions of Clause3(xi) of the Order are not applicable to the Company.
xii. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud on or by the Company noticed or reported during the year norhave we been informed of any such case by the Management.
| ||For SNMG & CO. |
| ||Chartered Accountants |
| ||FRN0.04921N |
| ||(Rakesh Kumar) |
|Place: New Delhi ||Partner |
|Dated: 05.09.2015 ||M. No. 083911 |