Shree Ganesh Forgings Ltd.
|BSE: 532643||Sector: Engineering|
|NSE: SGFL||ISIN Code: INE883G01018|
|BSE 00:00 | 14 Oct||Shree Ganesh Forgings Ltd|
|NSE 05:30 | 01 Jan||Shree Ganesh Forgings Ltd|
|BSE: 532643||Sector: Engineering|
|NSE: SGFL||ISIN Code: INE883G01018|
|BSE 00:00 | 14 Oct||Shree Ganesh Forgings Ltd|
|NSE 05:30 | 01 Jan||Shree Ganesh Forgings Ltd|
To the Members of
SHREE GANESH FORGINGS LIMITED
1. Report on Financial Statements :
We have audited the accompanying financial statements of SHREE GANESH FORGINGSLIMITED as at March 31 2019 which comprise the Balance Sheet as at March 31 2019the Statement of Profit & Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
2. Managements Responsibility for the Financial Statements :
Management and Board of Directors of the Company are responsible for the matters statedin section 134(5) of the Companies Act 2013 with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flow of the company in accordance with the accounting principlesgenerally accepted in India including Accounting Standards specified under section 133 ofthe Companies Act 2013 read with rule 7 of Companies (Accounts) Rules 2014. Theresponsibility includes the design implementation and maintenance of internal controlrelevant to the preparation and presentations of the financial statements that gives atrue and fair view and are free from material misstatement whether due to fraud or error.
3. Auditors Responsibility:
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provision of the Companies Act 2013 the accountingand auditing standards and matters which are required to be included in the Audit Reportunder the provisions of the act and rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under section 143(10) of the CompaniesAct 2013. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatements of thefinancial statements whether due to fraud or error. In making those risk assessment theauditor considers internal financial control relevant to the Company's preparation andfair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion onwhether the company has place an adequate internal financial control system over financialreporting and the operating effectiveness of such controls. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by company management as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
4. Basis for Qualified Opinion
a) The company was not able to produce the fixed deposit receipts The banks are notcooperating to provide any conformations of balances as the matter is pending with DEBTSRECOVERY TRIBUNAL COURT MUMBAI. Thus we are not able to comment on the actualbalances.
b) Impairment of assets not done as per Accounting Standard (AS) 28 Impairment ofAssets the impact of such impairment is not ascertainable.
c) Bank balance conformations have not been provided to us during the audithence we are unable to comment on the actual balances and the consequent impact on theloss & reserve of the company. The banks are not cooperating to provide anyconformations of balances as the matter is pending with DEBTS RECOVERY TRIBUNAL COURTMUMBAI.
d) Advance due from certain parties which in our opinion are considered doubtfulof recovery against which adequate provision has not been made.
e) The Company has failed to provide necessary information and data and has notdisclosed the impact of pending litigation as on 31st March 2019 on its financial positionin its financial statement.
f) Balance conformation for Trade receivable (Debtors) and other receivable(Advance to creditors) have not been provided as no suppliers are showing their interestto cooperate us during the audit hence we are not able to comment on the actual balance& the consequent impact on the loss & reserve of the company.
g) Depreciation as per the new schedule III of Company Act 2013 has not been calculatedan accounted due to non-availability of passed data of addition of fixed assets.
h) Mr. Deepak Sekhri & Mrs. Anita Sekhri the directors of the company aredisqualified as on 31.03.2019 from being appointed as directors in terms of section 164(2)of the Companies Act. The directors have filed an appeal before the NCLT for restorationof DIN
In our opinion and to the best of our information and according to the explanationsgives 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.
(a) In the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2019;
(b) In the case of the Statement of Profit and Loss of the loss for the year ended onthat date; and
(c) In the case of the Cash Flow Statement of the cash flows for the year ended onthat date
6. Key Audit Matters:
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
7. Emphasis of Matters
We draw you attention to the following matters in the Notes to the financialstatements:
a) The financial statements indicate that the company has accumulated losses and itsnet worth has been substantially eroded; the company has incurred net loss during thecurrent and previous year. These conditions along with other matters set forth in noteindicate the existence of a material uncertainty that may cast significant doubt about thecompany's ability to continue as a going concern. However the financial statements of theCompany have been prepared on a going concern basis. Our opinion is not modified inrespect of these matters.
b) Loan of State Bank of Hyderabad and State Bank of Patiala have been transferred bythe bank to Asset reconstruction company. This ARC has assigned the liability of paymentof these loans to the Guarantor of Shree Ganesh Forgings Ltd at a reconstructed amount.This does not have any impact or adjustment to the financial statement during the year.
c) The company has made proposal for one time settlement with State Bank of Hyderabadand State Bank of Patiala which was agreed by the bank authorities.
d) State Bank of India in terms of SARFAESI Act has taken possession and taken over thecontrol of land building and other fixed assets along with stocks etc. lying in thefactory premises of the company situated at C-3/C TTC Industrial Area Thane BelapurRoad Pawane Navi Mumbai.
8. Report on other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor's Report) Order 2017 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 (the Act') we give in the Annexure-A a statement on thematters 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) Except for the possible effect of the matter describe in the basis for qualifiedopinion paragraph above in our opinion proper books of accounts as required by law havebeen kept by the Company so far as 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 Balance Sheet the Statement of Profit and Loss and the CashFlow Statement comply with the Accounting Standards specified under section 133 of theAct read with rule 7 of the Companies (Accounts) Rules 2014;
e) The matter describe in the basis for qualified opinion paragraph above in ouropinion may have an adverse effect on the functioning of the company.
f) On the basis of written representations received from the directors as on March 312019 taken on record by the Board of Directors Mr. Deepak Sekhri & Mrs. Anita Sekhrithe directors are disqualified as on March 31 2019 from being appointed as a director interms of Section 164(2) of the Act. The directors have filed an for restoration of DIN.
g) With respect of adequacy of the internal financial control over financial reportingof the company and the operative effectiveness of such control refer to our separatereport in Annexure-B.
h) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditors Report in accordance with rule 11 of the Companies (Audit & Auditors) Rules2014.
a. The Company has failed to provide the necessary information and data and has notdisclosed the impact of pending litigations as on 31.03.2019 which would impact itsfinancial position.
b. The Company did not have any long term contracts including derivative contracts assuch the question of commenting on before the NCLT any material foreseeable losses thereondoes not arise.
c. The company has failed to transfer unpaid / unclaimed dividend amounting toRs.183958/- and share application money amounting to Rs.154786/- to the InvestorEducation and Protection Fund..
ANNEXURE-A TOINDEPENDENT AUDITORS REPORT
Referred to in paragraph 11 (f) of the Independent auditors Report of even date to themembers of SHREE GANESH FORGINGS LIMITED on the Standalone financial statement forthe year ended March 31 2019
Report on the Internal Financial Control Under Clause (i) of Sub-Section 3 of Section143 of the Act.
We have audited thefinancial control over financial reporting of SHREE GANESHFORGINGS LIMITED ("The Company") as of March 31 2019 in conjunction withour audit of the financial statements of the Company for the year ended on the date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible of 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention & detection of frauds & errors the accuracy & completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
Our responsibility is to express an opinion on the Company's internal financial controlover financial reporting based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Reporting ("theGuidance Note") & the Standards on Auditing deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlboth applicable to an audit of internal financial control and both issued by the ICAI.Those Standards & the Guidance Note required that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial control over financial reporting was established & maintained &if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control system over financial reporting obtaining an understandingof internal financial control over financial reporting assessing the risk that materialweakness exists & testing & evaluating the design & operating effectivenessof internal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risk of material misstatement of thefinancial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient & appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemsover financial reporting
Meaning of Internal Financial Control 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 & thepreparation of financial statements for external purpose in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting included those policies & procedures that
a) Pertain to the maintenance of records that in reasonable detail accurately &fairly reflect the transaction & disposition of the assets of the company.
b) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accounting principles& the receipts & expenditures of the company are being made only in accordancewith authorizations of management & directors of the company.
c) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use of disposition of the company's assets that could have asmaterial effect on the financial statements.
Inherent Limitation of Internal Financial Controls over Financial Reporting
Because of the inherent limitation 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 projection of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of change in conditions or thatthe degree of compliance with the policies or procedure may deteriorate.
Disclaimer of Opinion
According to the Information & explanations given to us the Company has notestablished its internal financial controls over financial reporting on criteriaconsidering the essential components of internal controls stated in the Guidance Note onAudit of internal financial control over financial Reporting issued by the Institute ofChartered Accountants of India even though the Company has existing internal standardoperating procedure & manuals for its various function prepared in accordance with theoperational functionality of the industry in which the company operates. Because of thereason we are unable to obtain sufficient appropriate audit evidence to provide a basisfor the opinion whether the company had adequate internal financial control over financialreporting and whether such internal financial control over operating effectively as at31st March 2019.
We have considered the disclaimer reported above along with implemented checks andbalances for various functions of the company of the company in determining the naturetiming and extent of audit tests applied in our audit of the financial statements of thecompany & the disclaimer does not affect our opinion on the financial statement ofthe
ANNEXURE-B TO INDEPENDENT AUDITOR'S REPORT
With reference to the annexure referred in the Auditors Report to the members of thecompany on the financial statement for the year ended 31.03.2019 and on the basis of suchchecks as we considered appropriate and in terms of the information and explanations givento us we state that
1. (a) The Company has maintained proper records showing particulars includingquantitative details and situation of its fixed assets;
(b) As explained to us all the fixed assets according to the practice of the Companyare physically verified by the Management at reasonable intervals in a phasedverification-programme which in our opinion is reasonable looking to the size of theCompany and the nature of its business.
(c) The Company has not disposed off any of its Fixed Assets so as to affect its goingconcern;
(d) 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 all immovable properties arein the name of the company.
2. None of the Fixed Assets of the Company have been revalued during the year.
3. We have not been able to physically verify the inventory due to the fact that thepossession of the factory premises was taken over by State Bank of India on 02/01/2018.
4. The Company has not produced any register required to be maintained under Section189 of the Companies Act 2013.
5. In our opinion and according to the information and explanations given to us thecompany has complied with the Provisions of Section 185 & 186 of the Companies Act2013 with respect to the loans & investment made.
6. The Company has not accepted any deposits from the public during the year.
7. As informed to us the Central Government has prescribed maintenance of cost recordunder sub section (1) of section 148 of the Act in respect of the Companies products.
8. According to the information and explanations given to us and based on the recordsof the company examined by us the Company is not regular in depositing the undisputedstatutory dues including Income Tax Sales Tax Service Tax and other material statutorydues as applicable with the appropriate authorities in India
9. The Company has not borrowed any loans from Financial Institution Bank orGovernment.
10. The Company has not made any initial public offer.
11. The Company has not noticed any fraud by it officers or employees.
12. The Company has not paid any Managerial Remuneration.
13. The Company is not a Nidhi Company.
14. We observed that inventory includes (Stores Spares & Loose Tools) are nonmoving items because that value shown in the Balance Sheet is more than 10 years old.
15. All the transactions with related parties are in compliance with section 177 &188 of the Companies Act 2013.
16. The Company has not made any preferential allotment or private placement of shares.
17. The Company has not entered to any non cash transaction with directors or personsconnected with them.
18. The Company has accumulated losses at the end of the financial year and hasincurred cash losses both in the financial year under report and the immediatelypreceding financial year.
19. In our opinion and according to the information and explanations given to us theCompany has not raised any term loans during the year.
20. The company is not a Non-Banking Financial Institution U/s.45-IA of the ReserveBank of India Act 1934.