The Members of
WELCAST STEELS LIMITED Ahmedabad.
Report on the IND AS Financial Statements
We have audited the accompanying IND AS financial statements of WELCAST STEELSLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2018 and the Statement of Profit and Loss (including Other Comprehensive lncome)the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information (hereinafter referred to as financial statements).
Management's Responsibility forthe Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation andpresentation of these financial statements that give a true and fair view of the state ofaffairs (financial position) Profit or Loss (financial performance including OtherComprehensive Income) the Cash Flows and Changes in Equity ofthe Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (IND AS) prescribed under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules2015 as amended.
This responsibility also includes maintenance of adequate accounting records inaccordance 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 IND AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there underand the Orderissued undersection 143(11) of the Act.
We conducted our audit ofthe financial statements in accordance with the Standards onAuditing specified under Section 143(10) ofthe Act. Those Standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the IND AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement ofthefinancial 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. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationofthe financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the INDAS 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 including Ind AS ofthe state of affairs(financial position) ofthe Company as at 31st March 2018 and its profit (financialperformance including Other Comprehensive lncome)the changes in equity and its cash flowsforthe year ended on the date.
Report on Other Legal and Regulatory Requirements
i. 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 ofthe Act and in terms of the information and explanations sought by us and given by thecompany we give a statement on the matters specified in paragraphs 3 and 4 of the Order.
(i) As per the books and records examined by us in the normal course of audit based onsuch audit check that we considered necessary and appropriate and to the best of ourknowledge and belief we state that:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name ofthe company.
(ii) The Inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material havingregard to the nature of business and volume of operations and the same have been properlydealt with in the books of accounts.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnership Firms or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 ("the Act") hence the question ofgrant of such loans being prejudicial to company's interest schedule of repayment ofinterest and principal receipt of principal and interest on regular basis and steps forrecovery of overdue amount for more than 90 days as per clause (iii) of the Order does notarise.
(iv) The company has not granted any loans investments nor given guarantees/securityto any party attracting the provisions of Section 185 and 186 of the Companies Act 2013hence the question of compliance with the said provisions as per clause (iv) of the Orderdoes not arise.
(v) The company has not accepted any deposits from the public hence the question ofcompliance with the directives issued by the Reserve Bank of India and the provisions ofsection 73 to 76 and other relevant provisions of the Companies Act 2013 and the rulesframed there under as per clause (v) of the Order does not arise.
(vi) We have broadly reviewed the books of accounts relating to materials Labour andother items of cost maintained by the company pursuant to the Rules made by the CentralGovernment for the maintenance of cost records under section 148(1) of the Act and we areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.
(vii) (a) According to the records of the Company the company is regular in depositingwith the appropriate authorities undisputed statutory dues including Provident FundEmployees' State Insurance Income Tax Sales Tax Service Tax Goods & Services TaxDuty of Customs Duty of Excise Value Added Tax Cess and other material statutory duesto the extent applicable to it.
(b) According to the information and explanation given to us and based on the recordsverified by us we state that no undisputed amount payable in respect of Provident fundEmployees State Insurance Income Tax Sales Tax Service Tax Goods & Services TaxValue Added Tax Duty of Customs Duty of Excise or Cess which have remained outstandingas at 31st March 2018 fora period of more than six months from the date they becamepayable.
(c) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Value Added Tax Service Tax Goods & Services Tax Duty ofCustoms Duty of Excise or Cess the dues which have not been deposited on account ofdispute except as stated below-
|Name of the Statute ||Nature of Dues ||Disputed Amount R. In Lakhs) ||Period to which amount relates ||Forum where the dispute is pending |
|Finance Act 1994 ||Service Tax ||116.64 ||September 2004 To August 2006 ||Customs Excise & Service Tax Appellate Tribunal Bangalore. |
|Foreign Trade Regulation Act (DEEC Scheme) ||Customs Duty Interest ||835.43*@ ||March 2005 To December 2008 And interest till 31st March 2018 ||High Court of Karnataka. |
@ Rs. 35 Lakhs has been deposited against the above.
(viii) In our opinion the Company has not defaulted in repayment of dues to banks. Thecompany has neither borrowed any loans from Financial Institutions other than banksGovernment nor issued any debentures and consequently the question of default in repaymentdoes not arise.
(ix) The company has not raised any money by way of initial public offer or furtherpublic offer and the company has not taken any term loans from banks or financialinstitutions during the year. Hence the question of application of moneys raised by way ofinitial public offer further public offer and term loans for the purpose for which theywere raised does not arise.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the company or on the company by its officers oremployees has been noticed or reported during the year.
(xi) The Company has not paid any managerial remuneration other than Director sittingfee within the meaning of sec 197 read with Schedule V to the Act. Hence the provisionsof Clause XI of the Order are not applicable.
(xii) The Company is not a Nidhi Company. Therefore the provisions of clause (xii) ofthe Order are not applicable to the Company.
(xiii) In our opinion the company has complied with the provisions of Sections 177 and188 of the Act and the disclosure of such transactions in the financial Statements etc.as required by applicable Accounting Standards in respect of transactions entered intowith related parties.
(xiv) The company has not made any preferential allotment/ private placement of shares/fully or partly convertible debentures during the year hence the requirement ofcompliance with provisions of Section 42 of the Act and utilization of amounts so raisedfor the purpose for which the funds were raised as per clause (xiv) of the Order doesnotarise.
(xv) In our opinion the Company has not entered into any non-cash transactions withdirectors or persons connected with him; hence the requirement of compliance to provisionsof Section 192 of the Act as per clause (xv) of the Orderdoes notarise.
(xvi) The company is not required to be registered under Sec 45-IAof the Reserve Bankof India Act 1934 hence the requirements of clause (xvi) of the Orderdoes not arise.
II. As required by section 143(3)ofthe Act we report that:
(i) 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;
(ii) 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;
(iii) The Balance Sheet Statement of Profit and Loss Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;
(iv) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015.
(v) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164(2) of the Act.
(vi) 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 A"; And
(vii) 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:
(a) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements- Refer clause C (1) of Note 27 to the financialstatements.
(b) As explained to us the Company does not foresee any loss on long-term contractentered in to. The company has not entered in to any derivative contracts. In view of theabove the question of making provision does not arise;
(c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
(d) The disclosure requirement as envisaged in Notification G.S.R 308 (E) dated 30thMarch 2017 is not applicable to the Company for the year.
|Place: Bengaluru ||for GANAPATH RAJ & CO |
|Date : 07-05-2018 ||Chartered Accountants |
| ||(FRN 000846S) |
| ||(C. GANAPATH RAJ) |
| ||Partner |
| ||Membership No 022955 |
ANNEXURE A-TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF WELCAST STEELS LIMITED
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls overfinancial reporting of WelcastSteels limited ("the Company") as of March 312018 in conjunction with our auditof 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 control based on the internal control overfinancial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols overfinancial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls overfinancial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system overfinancial 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 judgment 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 systemoverfinancial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
Acompany's internal financial control overfinancial reporting is a process designed toprovide 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation offinancial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 overfinancialreporting 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 the Company has in all material respects an adequate internalfinancial controls system overfinancial reporting and such internal financial controlsoverfinancial reporting were operating effectively as at March 312018 based on theinternal control overfinancial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.
|Place: Bengaluru ||for GANAPATH RAJ & CO |
|Date: 07-05-2018 ||Chartered Accountants |
| ||(FRN 000846S) |
| ||(C. GANAPATH RAJ) |
| ||Partner |
| ||Membership No 022955 |