To
The Members
BalajiGalvanising Industries Limited.
Secunderabad.
Report on the financial statements
We have audited the accompanying financial statements of Balaji
Galvanising‘industries Limited (‘"the Company"), which comprise the
Balance Sheet as at March 31, 2017. and the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended and a summary of significant accounting policies and
other explanatory information.
Managements responsibility for the financial statements
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 financial statements that give a true and fair view of the financial position,
financial performance 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, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
Auditors responsibility
Our responsibility is to express an opinion on these 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 fcules made there under.
We conducted our audit 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 perforin the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. 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. In making those risk assessments, the auditor
considers internal financial control relevant to the Companys preparation of the
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 accounting policies used and the reasonableness of the
accounting estimates made by the Companys Directors, as well as evaluating the overall
presentation of the 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 financial statements.
\
Opinion
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 Act
in the manne#>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 31st March 2017 and its loss and its cash flows 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 section (11) of section 143 of the
Act and in terms of the information and explanation sought by us and given by the
Companyand the books and records examined by us in the normal course of audit and to the
best of our knowledge and belief, we state that:
i. a)The company has maintained proper records showing full particulars including
quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by the management at
reasonable intervals; no material discrepancies were noticed on such verification. Hence
the question of dealing with such discrepancies in the books of account does not arise.
(c) 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. (a) As explained to us, inventories have been physically verified during the year
by the
• management at reasonable intervals, no material discrepancies were noticed
during the
course of physical verification of the inventories.
iii. The company has not granted any loans or advances in the nature of loans to
; parties covered in the register maintained under section 189 of the Act. Thus,
paragraph 3(iii) of the order is not applicable.
iv. In our opinion, the provisions of sec 185 and sec 186 of the Companies Act, 2013
are not applicable. Thus, the paragraph 3(iv) of the order is not applicable.
%
v. According to the information and explanations given to us, the company has not
accepted any deposits within the meaning of Sections 73 to 76 of Companies Act 2013.
vi. The Central Government has prescribed the maintenance of cost records u/s:\ 148(1)
of the Act for the manufacturing of Steel products, but the Company has not exceeded the
limits which have been specified by the Central Government for the maintenance of the cost
records. Thus, paragraph 3(vi) df the order is not applicable.
vii. (a) According to the information and explanations given to us and on the basis of
our examination ot the records ot the Company, amounts deducted/accrued in the books of
account in respect ot undisputed statutory dues including provident fund, income-tax,
sales tax, value added tax, service tax. cess and other material statutory dues have been
regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed statutory dues
payable in respect of provident fund, income tax, sales tax. value added tax, duty of
customs, service tax, cess and other material statutory dues were in arrears as at 31s1
March 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us. there are no material
dues ot income tax, duty of customs, service tax, value added tax which have not been
deposited with the appropriate authorities on account of any dispute. However according to
the information and explanations given to us, the duty of excise has not been deposited by
the Company on account of dispute:
| Name of the Statute |
Nature of
Dues |
Period to which the dispute related |
Forum where dispute is pending |
Amount (Rs.) |
| Central Excise Act, 1944 |
Excise Duty |
2012-13 |
Commissioner of Central Excise (Appeals) |
17,95,647 |
viii. The Company does not have any loans or borrowings from any financial institution,
banks, government or debenture holders during the year. Accordingly, paragraph 3(viii) of
the order is not applicable.
ix. The Company did not raise any money from the initial public offer or further public
offer (including debt instruments) and term loans during the year. Accordingly, paragraph
3(ix) of the order is not applicable.
x. • According to the information and explanations given to us, no material fraud
by the
Company or on the Company by its officers or employees has been noticed or reported
during the course of our audit.
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xi. According to the information and explanations given to us and based on the
examination of the records of the Company, the Company has paid/provided for managerial
remuneration in accordance with the requisite approvals mandated by the provisions of the
sec: 197 read with schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the
Company is not a nidhi Company. Accordingly, paragraph 3(xii) of the order is not
applicable. ip
xiii. According to the information and explanations given to us and based on our
examination ol the records of the Company, the Company has not entered into any
transaction with the related parties during the year. Accordingly paragraph 3(xiii) of the
order is not applicable.
xiv. According to the information and explanations given to us and based on our
examination ol the records of the Company, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year.
xv. According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into any non-cash
transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of
the order is not applicable.
xvi. The Company is not required to be registered under section 45IA of the Reserve
Bank of i
India Act. 1934.
Z- As required by Section 143(3) of the Act, we report that
i. 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;
ii. In our opinion proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
iii. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account;
iv. 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;
v. On the basis of written representations received from the directors as on March 31,
2017, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31.2017, from being appointed as a director in terms of Section 164(2) the
Act.
\i. With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in "Annexure A",
vu. With respect to the other matters to be included in the Auditors Report in
accordance with Rule I 1 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:
a) The Company does not have any pending litigations which would ii#pact its financial
position.
b) The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
c) There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company.
d) The Company has provided requisite disclosures in the financial statements as lo
holdings as well as dealings in Specified Bank Notes during the period from 8th November,
2016 to 30th December. 2016. Based on audit procedures and relying on the management
representation we report that the disclosures are in accordance with looks of account
maintained by the Company and as produced to us by the Management.
Place: Secunderabad Date: 29.05.2017
Aiiiiexure A to the Auditors Report
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 Balaji
Galvanising Industries Limited ("the Company) as of March 3L 2017 in conjunction
with our audit of the financial statements of the Company for the year ended on that date.
P
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls 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 ol Internal Financial Controls Over Financial Reporting
("Guidance Note") issued by the Institute ot Chartered Accountants of India.
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 Act.
Auditors Responsibility i
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
(‘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, both
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 were
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 ot
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit ot internal financial controls over financial reporting included
obtaining an understanding ot 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 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 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 financiastatements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and piocoduics that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and iairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that 4 transactions
are recorded as necessary to permit preparation of financial statements in tucoid.ime
with generally accepted accounting principles, and that receipts and expenditures ol the
company arc being made only in accordance with authorizations of management and directors
ol the company; and t -\) provide reasonable assurance regarding prevention or timely
detection ol unauthorized acquisition, use, or disposition of the companys assets that
could have a material effect on^lhe financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, inciuda . 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 ol any evaluation ol the internal financial controls over financial
reporting to future periods are subject to the risk that 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.
Opinion
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 March 31, 2017, 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 b. the Institute of Chartered
accountants of India.
Place: Secunderabad
Date: 29-05-2017
+91-9892691696
