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Shri Gang Industries & Allied Products Ltd.

BSE: 523309 Sector: Others
NSE: N.A. ISIN Code: INE241V01018
BSE 05:30 | 01 Jan Shri Gang Industries & Allied Products Ltd
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Shri Gang Industries & Allied Products Ltd. (SHRIGANGINDUS) - Auditors Report

Company auditors report

To the Members of Shri Gang Industries & Allied Products Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Shri Gang Industries &Allied Products Limited ("the Company") which comprise the Balance Sheet asat March 31 2017 the Statement of Profit and Loss and the Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.

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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting 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.

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 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 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 control relevant to the Company's preparation and fair presentation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of 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 financial statements.

Matter for Emphasis

Attention of the members is drawn to-

a) With reference to note no 4 5 9 & 25 these accounts have been preparedwithout any provision of interest on the overdue amount of interest free loan in lieu ofTrade Tax of Rs.446.00 lacs from PICUP and on overdue principal amount of deferred TradeTax amounting to Rs. 3016.09 lacs in accordance with the UP Govt Order dated 29.12.2016waiving all accumulated interest and future interest subject to fulfilment of theconditions & adherence to revised schedule of repayment.

b) With reference to Note 5 & 24 charges on account of Minimum demand charges(with surcharge) and surcharge on deferred power charges accumulating in aggregate to Rs2243.06 lacs levied by Paschimanchal Vidyut Vitran Nigam has not been provided for inthese accounts as it has been waived by the Government of Uttar Pradesh vide its orderdated 29.12.2016. The waiver is subject to the approval of the Uttar Pradesh ElectricityRegulatory Commission for which the petition has already been filed.

c) With reference to Note no. 26 that the company suspended its manufacturingactivities since 25.03.2010 and accordingly declared 'lay off for indefinite period.During the current year the company has partially resumed its manufacturing operationswhich shall be gradually scaled up. Such long suspended activities partial resumption ofoperations coupled with the fact that the company's accumulated losses have exceeded itsnet worth indicates the existence of a material uncertainty about the company's abilityto re-establish its full operations severally affecting the 'going concern assumption'.However these accounts have been prepared by the management on 'going concern assumption'in view of the UP Govt. order No 1571/77-1-2016-10 (BIFR)/ 2009TC dated 29.12.2016 asexplained in the said note 26.

Basis for Qualified Audit Opinion

1) Attention is drawn that the Capital Work in Progress of Rs.9.96 lacs which has notyet been completed and commissioned may not be realizable at the values shown in thesefinancial statements and for which no provision for its impairment in its value if any ismade. Accordingly the losses for the current year and accumulated losses are shown lessand non-current assets are shown in excess of Rs.9.96 lacs.

2) Interest on unpaid overdue Public Deposits of Rs.30.00 lacs for the year has notbeen provided for amounting to Rs. 3.00 lacs (accumulated Rs.20.25 lacs approx. up to dateof Balance Sheet). Accordingly loss for the current year and accumulated losses are lessand current liabilities are also less by Rs. 20.25 lacs.

3) In the absence of adequate documentation and documentary proofs we are unable tocomment whether there is any impairment in the value of the fixed assets due to efflux oftime and suspension of manufacturing activities since March 2010 and requirement ofprovision for the same which might be required to be provided for.

In the absence of adequate records and any proofs of physical verification thediscrepancies realizable/salvage value the impact of impairment cannot be ascertained.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us subject to the matters of emphasis and except for the effects of the mattersdescribed in Basis for Qualified Opinion paragraph the aforesaid financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2017 and its loss and its cash flows forthe year ended on that date.

Report on Other Legal and Regulatory Requirements

1. 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 of theAct we give in the Annexure-A a statement on the matters specified in theparagraph 3 and 4 of the Order as may be applicable.

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) 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 the cash flow statementdealt with by this Report are in agreement with the books of account;

(d) Except for the effects of the matter described in the Matter of Emphasis and Basisfor Qualified Opinion paragraph in our opinion the Balance Sheet the Statement ofProfit and Loss and the Cash Flow statement comply with the Accounting Standardsspecified in Section 133 of the Act; read with Rule 7 of the Companies (Accounts) Rules2014;

(e) Our observations or comments as stated in clause (c) of Matter of Emphasis relatingto the going concern matter and all the clauses of Basis for Qualified Audit report inrelation to the financial impact in our opinion may have adverse effect on thefunctioning of the company.

(f) On the basis of written representation received from the Directors as on March 312016 and taken on record by the Board of Directors we report that none of the Directorsis disqualified as on March 31 2016 from being appointed as a Director in terms ofsection 164(2) of the Act.

(g) with respect to the adequacy of the internal financial control over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in 'Annexure B' ; and

(h) 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 which would impact itsfinancial position in its financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company.

iv. The company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the company.

For TAS ASSOCIATES
Chartered Accountants
[Firm Registration No. 010520N]
Sd/-
Mukesh Agarwal
Place: New Delhi Partner
Date: 29.05.2017 M No. 090582