TO THE MEMBERS OF GLOBUS CORPOORATION LIMITED.
Report on the Audit of Financial Statements:
Opinion
We have audited the accompanying financial statements of GLOBUS CORPOORATION LIMITED
("the Company"), which comprise the Balance Sheet as at 31st March,
2019, the Statement of Profit and Loss, and the Cash Flow Statement for the year then
ended and notes to the financial statement including a summary of the significant
accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the
Companies Act, 2013 ("Act") in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31stMarch, 2019, and its profit, and its
Cash Flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards of Auditing (SAs) specified
under Section 143 (10) of the Act. Our responsibilities under those SAs are further
described in the Auditors Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India together with the ethical
requirements that are relevant to our audit of the financial statements under the
provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material Uncertainty relating to Going Concern
We draw attention to Note 1-4 of the Key audit matters, which indicates that virtual
uncertainty exists regarding future income and various pending suits against the company.
These events or conditions indicate that a material uncertainty exists that may cast
significant doubt on the companys ability to continue as a going concern. Our opinion is
not modified in respect of this matter
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
.
| Key Audit Matters |
How the Matter was addressed in our audit |
| 1. Deferred Tax Assets of Rs. 4.03 Crs. |
Our audit procedures included the following: |
|
(i) We held discussion with the management with respect to the future possibility of
generating revenues to utilize the deferred tax assets. |
|
(ii) Deferred tax asset created denotes tax effect of brought forward losses to be
adjusted against future period income. Since, the company has discontinued business of
manufacturing due to lack of funds, there is no virtual certainty regarding future
incomes. However the management is of the view that the company would be able to generate
future income resulting into set-off of losses against future incomes. |
| 2. Bank claim of Rs. 276.09 lacs |
Our audit procedures included the following: |
|
(i) We discussed the matter with the management and saw the exchange of the relevant
communications with the bank. |
|
(ii) As explained and informed to us by the management, the Bank had filed recovery
proceedings against the Company with the Debt Recovery Tribunal (DRT) for recovery of Rs.
317.64 Lacs plus subsequent interest and charges. Subsequently they auctioned the
properties of the Company and have recovered the above mentioned amount. The Bank is
claiming a further Rs. 276.09 lacs towards contractual dues, penal interest and other
charges. We have discussed this issue with the management who are pursuing the matter of
obtaining a waiver of the balance amount. Therefore, the Company has not provided for this
amount in their accounts. |
| 3. Contingent liability in relation to tax litigations |
Our audit procedures included the following |
| - Sales Tax dues of Rs. 734.04 lacs. |
(ii) We obtained an understanding and details of completed tax assessments, demands
issued by tax authorities, orders/notices received with respect to the litigations, from
the management. |
| - Income Tax dues of Rs. 56.68 lacs |
|
|
(ii) We held discussions with management to understand their assessment of the
quantification and likelihood of significant exposures and the provisions required for
specific cases. Various appeals have been filed by the company for the waiver of interest
and penalty and these VAT and Income Tax liabilities are included in the amount of dues
stated. The management is of the view that liability will be accounted as and when
settled. Therefore, no provision for the same is made in the Financial Statements. |
| 4. No confirmation from certain debtors |
Our audit procedures included the following: |
|
(i) We obtained details of the amounts outstanding from the debtors and the
managements views on the same. |
|
(ii) We have been informed by the management that no confirmations have been received
from any of the debtors, raising serious doubts about the recovery of the same. However,
we have been informed by the management that they are following up for the recovery and
will take legal recourse if necessary. In their opinion, the same does not require any
provision. |
Other Information
The Companys management and Board of Directors are responsible for the other
information. The other information comprises of Management Reports such as Boards Report,
Management Discussion and Analysis, but does not include the financial statements and our
Auditors Report thereon. Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon. If, based on
the work we have performed on the other information that we obtained prior to the date of
this Auditors Report, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this
regard.
Managements Responsibility for the Financial Statements:
The Companys management and Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the
preparation of these financial statements that give a true and fair view of the state of
affairs, its profit and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting Standards specified under
Section 133 of the Act. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of the
assets of the Company and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design, implementation and maintenance of
adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error. In preparing the financial
statements, management and Board of Directors are responsible for assessing the Companys
ability to continue as going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends
to liquidate the Company or to cease operations, or has no realistic alternative but to do
so.
The Board of Directors is also responsible for overseeing the Companys financial
reporting process
Auditors Responsibility for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether that financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an Auditors Report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decision of the users taken on the
basis of theses financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omission, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in circumstances. Under Section 143 (3) (i)
of the Act, we are also responsible for expressing our opinion on whether the Company has
adequate internal financial control with reference to financial statements in place and
the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and reasonableness of
accounting estimates and related disclosure made by management.
• Conclude on appropriateness of managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our Auditors Report to the related disclosure are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of Auditors Report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
• Evaluate the overall presentations, structure and content of the financial
statements, including the disclosure, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation. We
communicate with those charged with governance regarding among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit. We also provide those
charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be through to bear on our independence, and where
applicable, related safeguards. From the matters communicated with those charged with
governance, we determine those matters that were of most significance in the audit of the
financial statements of the current period and are therefore the key audit matters. We
describe these matters in our Auditors Report unless law or regulation precludes public
disclosure about the matter or when in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing
so should reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditors Report) Order, 2016 ("the order"),
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in the Annexure A a statement on the matters
specified in paragraphs 3 and 4 of the order, to the extent applicable 2. (A) 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 best
of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive
income), and the statement of the Cash Flows dealt with by this Report are in agreement
with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st
March, 2019 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2019 from being appointed as a director in terms of Section
164 (2) of the Act.
(f) With respect to the adequacy of the Internal Financial controls with reference to
financial statements of the company and the operating effectiveness of such controls,
refer to our separate report in Annexure B. (B) With respect to the other
matters to be included in the Auditors Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial
position
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
ANNEXURE - A TO INDEPENDENT AUDITORS REPORT
With reference to the Annexure referred to in paragraph 1 under the heading
‘Report on Other Legal & Regulatory Requirement of the Independent Auditors
report to the members of Globus Corpooration Limited on the financial statements for the
year ended March 31, 2019, we report that:
(i) The Company does not have any Fixed Assets and hence the clause (i) is not
applicable.
(ii) The Company does not have any Inventories and hence the clause (ii) is not
applicable.
(iii) The Company has not granted any loans, secured or unsecured to companies, firms,
Limited Liability Partnership or other parties covered in the Register maintained under
Section 189 of the Companies Act, 2013 and hence clause (iii) is not applicable.
(iv) In view of clause (iii) above, our opinion on whether the company has complied
with the provisions of section 185 and I86 of the Companies Act, 2013 in respect of loans,
investments, guarantees, and security is not applicable
(v) The company has not accepted deposits from the public, within the meaning of
sections 73 to 76 or anyother relevant provisions of the Companies Act, 2013 and the rules
framed there under, Hence, the clause
(v) of the Order is not applicable to the company. (vi) To the best of our knowledge
and according to the information and explanations given to us, the central government has
not prescribed the maintenance of cost records under Section 148(1) of the Companies Act,
2013 for any services rendered by the Company.
(vii) (a) The company has generally been regular in depositing undisputed statutory
dues including provident fund, employees state insurance, income-tax, sales-tax, service
tax, duty of customs, duty of excise, GST, value added tax, cess and any other statutory
dues with the appropriate authorities.
According to the information and explanations given to us, there were disputed amounts
payable in respect of the aforesaid dues as at 31 March 2019 for a period of more than six
months from the date they became payable and details of the same are as under:
| Nature of the Statue |
Nature of dues |
Amount in Rs. |
| Maharashtra Value added Tax Act, 2005 |
Value added Tax |
734.04 lacs |
| Income Tax Act, 1961 |
Income Tax |
56.68 lacs |
(i) In our opinion and according to the information and explanations given by the
management, the Company had defaulted in payment of outstanding dues of Rs. 2.76 Crs as
interest and penalty to the bank which is treated as a contingent liability (Refer Notes
to Accounts). The Company has not issued any debentures and hence default or otherwise on
payments to debenture holders is not applicable.
(ii) According to the information and explanations given to us, the Company has not
raised moneys by way of initial public offer or further public offer (including debt
instruments) and term loans during the year
(iii) Based upon the audit procedures performed and the information and explanations
given by the management, we report that no fraud by the Company or on the company by its
officers or employees has been noticed or reported during the year.
(iv) Based upon the audit procedures performed and the information and explanations
given to us, the Company has not paid any Managerial Remuneration for the Financial Year
2018-19 as laid down by the provisions of section 197 and other applicable provisions of
the Companies Act, 2013, if any.
(v) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of
clause 4 (xii) of the Order are not applicable to the Company.
(vi) In our opinion, all transactions with the related parties are in compliance with
section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the
Financial Statements as required by the applicable accounting standards.
(vii) Based upon the audit procedures performed and the information and explanations
given to us, the company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year under review.
Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable.
(i) Based upon the audit procedures performed and the information and explanations
given to us, the company has not entered into any non-cash transactions with directors or
persons connected with them. Accordingly, the provisions of clause 3 (xv) of the Order are
not applicable.
In our opinion, the company is not required to be registered under section 45-IA of the
Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the
order are not applicable to the company
"A NNEXURE B" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE
FNAN I CIAL STATEMENTS OF GLOBUS CORPOORATION LMITED
Report on the Internal Financal Controls und i er Clause (i) of Sub-section 3 of
Section 143 of the Companies Act. 2013 ("the Act")
We have audited the internal financial controls over financial eporting of Globus
Corpooration Limited (the Company) as of March 31, 2019 in conjunction with our audit of
the financial statements of the Company for the year ended on that date. In our opinion,
the Company has, in all material respects, adequate internal financial controls with
reference to financial statements and such internal financial controls were operating
effectively as at 31 March 2019, based on the internal financial controls with reference
to financial statements criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Repoting issu r ed by the Institute of Chartered Accountants of
India ( the Guidance Note ) . .
Managements Responsibility for Internal Financial Controls.
The Companys management and the Board of Directors are responsible for establishing
and maintaining internal financial controls based on the internal financial control with
reference to financial reporting criteria established by the Company considering the
essential components of internal control stated in the Guidance Note. These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring t!1e orderly and efficient
conduct of its business, including adherence to companys polices, the safeguarding of its
assets, the prevention and detection of frauds and errors, the accuracy and completeness
of the accounting records, and the timely preparation of reliable financial information,
as required under the Companies Act, 2013 (hereinafter e r ferred to as the Act).
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls with reference to financial statements based on our audit. We conducted our audit
in accordance with the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting (the Guidance Note) and the Standards on Auditing, issued by ICAI
and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the
extent applicable to an audit of internal financial controls with reference to financial
statements, both applicable to an audit of Internal Financial Contr o ls and, both issued
by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls over financial
reporting was established and maintained and if such controls operated effectively in all
material respects, Our audit involves performing procedures to obtain audit evidence about
the adequacy of the internal financial controls system over financial reporting and their
operating effectiveness. Our audit of internal financial controls with refee r nce to
financial statements included obtaining an understanding of internal financial controls,
assessing the risk that a material weakness exists, and testing and evaluating the design
and oper at ing effectiveness of internal control based on the assessed is r k. The
procedues selected depe r nd on the Auditors judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error
. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls with Reference to Financial Statements
A companys internal financial control with reference to financial statements is a
process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A companys internal financial control with
reference to financial statements includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a mateialr effe ct on the financial statements.
Inherent Limitations of Internal Financial Controls with Reference to Financial
Statements
Because of the inherent limitations of internal financial controls with reference to
financial statements, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls with
respect to financial statements to future periods are subject to the risk that the
internal financial control with reference to financial statement may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
|
For P,D.Saraf & Co. |
|
Chartered Accountants |
|
Firms Registration NO.109241W |
|
Madhusudan Saraf |
|
Partner |
|
Membership No. 41747 |
| Place: Mumbai |
|
| Date: 28thMay, 2019 |
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+91-9892691696
