Aditya Forge Ltd Auditors Report.
TO THE MEMBERS OF,
ADITYA FORGE LIMITED
Report on the Indian Accounting Standard (Ind As) Financial Statements
We have audited the accompanying Ind AS financial statements of ADITYA FORGE LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2018; the statement of profit and loss (including other comprehensive income), the cash flows statement and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other, explanatory information (herein after referred to as "Ind AS financial statements").
Managements Responsibility for the Ind AS Financial Statement
The Companys 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS of the State of affairs (financial position) of the Company as at March 31, 2018; its Profit (financial performance including other
comprehensive income) its Cash Flows and changes in equity for the year ended on that date.
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 Act, we give in the "Annexure-A" a statement onthe matters 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 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, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder;
e) On the basis of the written representations received from the directors as on March 31, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, 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 control over financial reporting of the Company and operating effectiveness of such controls, refer to our separate Report in "Annexure-B."
g) 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 has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note No. 17 to the Ind AS financial statements.
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.
|For, K J Shah & Co.,||Kamlesh J Shah|
|Firm Reg. No. 132369W||Membership No.42390|
|Date: 31st May, 2018|
"ANNEXURE - A" TO THE INDEPENDENT AUDITORS REPORT
CARO 2016 Report on the financial staten^qt of ADITYA FORGE LIMITED for the year ended March 31, 2018.
(Referred to in paragraph 1 under Report on Other Legal and Regulatory
Requirements section of our report of even date)
To the Member of Aditya Forge Limited
On the basis of records produced to us for our verification/ examination as we
considered appropriate and in terms of information and explanations given to us
for our enquiries, we state that;
i. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets on the basis of available information.
b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. As informed to us, no material discrepancies were noticed on such physical verification.
c) As explained to us, no substantial part of fixed assets has been disposed off (except some part of plant which was non- functioning and as explained was not hypothecated with any FI/Bank) during the year, and it has not affected the going concern.
d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. In respect of its inventories:
a) The inventories have been physically verified at regular reasonable intervals during the year by the management.
b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are adequate.
c) The company has maintained proper records of inventories. As per the information and explanation given to us, no material discrepancies were noticed on physical verification.
iii. In respect of the loans, secured or unsecured, granted by the company to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. :
a) The Company has not granted loan to; firms and other parties covered in the register maintained under section 189 of the Companies Act, 2013. Hence no reporting is given on this clause.
b) The Company has taken loan under the section 189 of companies act, 2013 8s its repayable on demand.
c) According to the information and explanations given to us all other terms and conditions for such loans are not prima facie prejudicial to the interest of the company.
iv. In respect of internal control.
In our opinion and according to the information and explanation given to us, the Company has an adequate internal control system commensurate with its size and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit we have not observed any continuing failure to correct major weaknesses in such internal control system.
v. In respect of deposits from public
The Company has not accepted any deposit within the meaning of Section 73 to 76 of the Companies Act 2013 and the rules framed there under.
vi. In respect of maintenance of cost records
We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for Maintenance of cost records under section 148(1) of the Act in respect of Companys product to which the said rules are made applicable and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate.
vii. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues including Employees State Insurance, Sales Tax, Wealth Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues have been deposited with appropriate authorities subject to following note as per clause 7 (b).
b) According to the information and explanation given to us, following amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2018 for a period more than six months from the date of becoming payable.
|Tax Deducted at Source||11,67,819|
|Provident Fund of Employees 8s Employer||2,31,144|
|Professional Tax of employee||5,50,070|
There were disputed statutory dues of the company that have not been deposited on account of matters pending before appropriate authorities. The same are as below;
Name of the Statue
Nature of the Due
Period to which the amount relates
Forum where dispute is pending
Tax & Interest
|The appeal was decided in favor. Against the same the revenue has preferred an appeal before Income Tax Appellate Tribunal Ahmadabad Benches.|
Tax & Interest
|Commissioner of Income Tax Appeal Baroda|
|Appeal pending for appellate Authority|
Tax & Interest
F.Y 2012- 13, 2013- 14, 2014- 15
|Commissioner of Income Tax Appeal Baroda|
viii. In respect of dues to financial institution /banks/debentures
Madhavpura Mercantile Co-op Bank Limited(MMCB) is under Liquidation, as the result of which the company is not able to do banking transaction with it. The bank has filed a case against the company in the Court of Board of Nominees. The company has provided for Interest of Rs.1,92,11,140 to arrive at the figure for which case is filed by the Bank with the Court of Board of Nominees as per the Notice No. MMCB/HO/44/229/2011-12 dated 4th January, 2012 issued to the company by MMCB. Interest from the date of decree on the outstanding amount of the suit is yet to be charged to the Profit and loss account. The Company had shown their willingness to settle the account as per OTS offered to them by the Bank (MMCB) vide their letter No. MMCB/SHB/43/10/11 Dated10/06/2010. The request of Company is pending. In the meanwhile the MMCB has offered new OTS Scheme. The Company has shown their willingness subject to arriving at OTS amount which was offered to the Company vide their Letter dated 10th June 2010 for an amount of Rs. 4.76crores. The necessary discussion between the Company and MMCB is under way.
The company has also filed a counter claim of Rs. 12,16,19,311/- on account of sudden closure of Banks Branch at Vadodara, excessive charging/ recovering of interest from working capital facilities forcing the company to face financial crunch resulting into loss of Export orders etc which is also pending before the Hon Civil Court at Vadodara
ix. In respect of application of Term loans.
a. The company has not raised any money by way of initial public offer or further public offer (including debt Instruments) during the year. Hence, reporting on utilization of such money does not arise.
b. The term loans raised during the year have been utilized for the purpose for which they were obtained. The term loans outstanding at the beginning of the year were applied for the purposes for which they were raised.
x. In respect of Fraud
During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanation given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. In respect of Managerial Remuneration.
In our opinion and according to the information and explanations given to us, managerial remuneration has been provided & paid in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act,2013 (including approval by the Central Government).
xii. In respect of Nidhi Companies
In our opinion and according to information and explanations given to us the Company is not Chit fund or a Nidhi or Mutual benefit fund/society. Therefore, paragraph 3 (xii) of the Order is not applicable to the Company.
xiii. In respect of Related Parties Transactions
a) In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013.
b) The details of transactions during the year have been disclosed in the Ind AS Financial Statements as required by the applicable accounting standards.
xiv. In respect of Preferential allotment/ Private placement
During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Therefore paragraph 3 (xiv) of the Order is not applicable to the Company.
xv. In respect of Non-Cash Transactions with Directors
According to the information and explanation given to us by the management the Company has not entered into any non-cash transactions with the directors or persons connected with them as referred to in section 192 of the Act.
xvi. In respect of Registration with RBI
According to the information and explanation given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
|Place: Vadodara||For, K J Shah & Co.,|
|Date: 31st May, 2018||Chartered Accountants|
|FirmjRegv No. 132369W|
"ANNEXURE - B" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2(f) under Report on Other Legal and Regulatory Requirements section of our report of even date)
Report on the Internal Financial Controls under 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 reporting of "ADITYA FORGE LIMITED" as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal financial controls based on the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, 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.
Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting 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 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 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 over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend 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 are sufficient andappropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purpose in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that;
I. Pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
II. 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 authorizations of management and directors of the company; and
III. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting 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 Reporting issued by the Institute of Chartered Accountants of India.
|For, K J Shah & Co.||/ Kamlesh J Shah|
|FirrA ReSxNo. 132369W||Membership No.42390|
|Date: 31st May, 2018|