To the Members of GNA AXLES LIMITED.
Report on the audit of the standalone financial statements. OPINION
We have audited the accompanying Standalone financial statements of GNA
AXLES LIMITED ("the Company"), which comprise the Balance Sheet as at, March
31, 2023, the statement of Profit and Loss (including Other Comprehensive Income), the
Statement of Changes in Equity and the Statement of Cash Flows ended on that date, and a
summary of significant accounting policies and other explanatory information (hereinafter
referred to as the "standalone financial statements").
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid Standalone financial statements give the
information required by the Companies Act, 2013 (the "Act") in the manner so
required and give a true and fair view in conformity with the Indian Accounting Standards
prescribed under section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, (" Ind AS") and other accounting principles
generally accepted in India, of the state of affairs of the Company as March 31, 2023, the
profit and total comprehensive income, changes in equity and its cash flows for the year
ended on that date.
BASIS FOR OPINION
We conducted our audit of the standalone financial statements in
accordance with the standards on auditing specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further described in the
auditors responsibilities for the audit of the standalone 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 there under, 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 on the standalone financial statements.
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.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS REPORT
THEREON
The Companys board of directors are responsible for the
preparation of the other information. The other information comprises the information
included in the Boards Report including Annexures to Boards Report Corporate
Governance and share holder information, but does not include the financial statements and
our auditors report thereon.
Our opinion on the Standalone financial statements does not cover the
other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the standalone financial statements or
our knowledge obtained during the course of our audit or otherwise appears to be
materially misstated.
If, based on the work we have performed, 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 STANDALONE FINANCIAL STATEMENTS
The Companys Board of Directors are responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to
the preparation of these Standalone Ind. AS financial statements that give a true and fair
view of the financial position, financial performance in accordance with the accounting
principles generally accepted in India, including the Accounting Standards Ind. AS
specified under Section 133 of the Act, read with Rule 7 of the Companies (Indian
accounting standard) Rules, 2015 as amended. 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 Ind. As 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 is responsible for
assessing the Companys ability to continue as a 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 are also responsible for overseeing the
Companys financial reporting process.
AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the
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 decisions
of users taken on the basis of these 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
standalone 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 omissions, 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 the circumstances. Under section
143(3) (i) of the Companies Act, 2013, we are also responsible for expressing our opinion
on whether the company has adequate internal financial controls system in place and the
operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by management.
Conclude on the 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 disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditors report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the
standalone financial statements, including the disclosures, 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 thought
to bear on our independence, and where applicable, related safeguard. 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 would 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, 2020
("the Order"), as amended, 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 on the 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 purpose 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, Statement of Profit and loss (including other
comprehensive income), the statement of change in equity, the statement of cash flow and
notes to the standalone financial statements dealt with by this report are in agreement
with the books of account.
d. In our opinion, the aforesaid Standalone financial statements comply
with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of
the Companies (Indian Accounting Standards) Rule 2014 as amended.
e. As per the management representation we report. no funds have been
advanced or loaned or invested by the company to or in any other person(s) or entities,
including foreign entities ("Intermediaries") with the understanding that the
intermediary shall whether directly or indirectly lend or invest in other persons or
entities identified in any manner by or on behalf of the company (Ultimate Beneficiaries)
or provide any guarantee, security or the like on behalf of ultimate beneficiaries. no
funds have been received by the company from any person(s) or entities including foreign
entities ("Funding Parties) with the understanding that such company shall whether,
directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the funding party (Ultimate beneficiaries ) or
provide guarantee, security or the like on behalf of the Ultimate beneficiaries.
Based on the audit procedures performed, we report that nothing has
come to our notice that has caused us to believe that the representations given under
sub-clause (i) and (ii) by the management contains any material mis-statement.
f. In our opinion Company has complied with section 123 of the
Companies Act, 2013 with respect to dividend declared/paid during the year.
g. On the basis of the written representations received from the
directors as on March 31, 2023 taken on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2023 from being appointed as a director in terms
of Section 164 (2) of the Act.
h. 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 B". Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of the Companys
internal financial controls over financial reporting.
i. With respect to the other matters to be included in the
Auditors Report in accordance with the requirements of Section 197(16) of the Act,
as amended. In our opinion and to the best of our information and according to the
explanations given to us, the remuneration paid by company to its directors during
the year is in accordance with the provisions of Section 197 of the Act.
j) With respect to the other matters to be included in the auditors
Report in accordance with rule II of the Companies (Audit and auditors) Rule, 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 standalone Ind. AS financial Statements- Refer notes to 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 were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
"ANNEXURE "A"
TO THE INDEPENDENT AUDITORS
Referred to in paragraph 1 under the heading Report on Other Legal
& Regulatory Requirement of our report of even date to the Standalone Ind. AS
financial statements of the Company for the year ended March 31,2023.
1) PROPERTY, PLANT & EQUIPMENT:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of its Property, Plant & Equipment;
(b) As explained to us, the Property, Plant & Equipment have been
physically verified by the management at reasonable intervals in accordance with regular
programme of verification. According to the information and explanation given to us no
material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the
company.
(d) No re-valuations were done during the year.
(e) No proceeding has been initiated or pending against the company for
holding any Benami Property under The Benami Transactions (Prohibition) Act, 1988
2) INVENTORY
(a) As explained to us, the management has conducted the physical
verification of inventory at reasonable intervals.
(b) No Material discrepancies of 10% or more in the aggregate for each
class of inventories were noticed on physical verification of the inventory by the
management as compared to books records.
(c) The company has been sanctioned working capital limits in excess of
Rs. 5.00 Crores from banks or financial institutions on the basis of security of current
assets.
3) LOANS, GUARANTEE AND ADVANCES GIVEN
According to the information and explanations given to us and on the
basis of our examination of books of accounts, the Company has not granted any loans,
secured or unsecured to companies, firms, Limited
Liability partnerships or other parties covered in the Register
maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a)
to (c) of the order are not applicable to the Company and hence not commented upon.
4) LOANS, GUARANTEE AND ADVANCES TO DIRECTOR OF COMPANY
I n our opinion and according to the information and explanations given
to us, the company has complied with the provisions of section 185 and I86 of the
Companies Act, 2013 in respect of loans, Guarantee and advances.
5) DEPOSITS
The Company has not accepted any deposits from the public and hence the
directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or
any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules,
2015 with regard to the deposits accepted from the public are not applicable.
6) MAINTENANCE OF COST RECORDS
As informed to us, the maintenance of Cost Records has not been
specified by the Central Government under sub-section (1) of Section 148 of the Act, in
respect of the activities carried on by the Company.
7) DEPOSIT OF STATUTORY LIABILITIES
(a) According to information and explanations given to us and on the
basis of our examination of the books of account, and records, the Company has been
generally regular in depositing undisputed statutory dues including Provident Fund,
Employees State Insurance, Income-Tax, Goods and Service Tax, Customs Duty, Cess and any
other statutory dues with the appropriate authorities. According to the information and
explanations given to us, no undisputed amounts payable in respect of the above were in
arrears as at March 31, 2023 for a period of more than six months from the date on when
they become payable.
(b) According to the information and explanation given to us, there are
no material dues of customs duty and Income Tax, which have not been deposited with the
appropriate authorities on account of any dispute. However, according to information and
explanations given to us, the following dues of sales tax, Goods & service tax and
value added tax have not been deposited by the Company on account of disputes;
| Nature of the Statute |
Nature of the Dues |
Amount (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
| Punjab Sales Tax Act |
Demand P-VAT |
5467036 |
2009-2010 |
VAT Tribunal |
| Punjab Sales Tax Act |
Demand P-VAT |
2225430 |
2008-2009 |
VAT Tribunal |
| Punjab Sales Tax Act |
Demand P-VAT (Crane |
180000 |
2004-2005 |
VAT Tribunal |
| Goods & Service Tax Liability |
RCM |
6449522 |
2018-2019 |
Before Assistant Commissioner |
c) The company management believes that the ultimate outcome of these
contingent liabilities will not have a material adverse effect on the Companys
financial position and its results of operations.
8. SURRENDERED OR DISCLOSED AS INCOME IN THE TAX ASSESSMENTS
The company does not have any transactions to be recorded in the books
of accounts that has been surrendered or disclosed as income during the year in the Tax
Assessments under The Income Tax Act, 1961.
9. DEFAULT IN REPAYMENT OF BORROWINGS
In our opinion and according to the information and explanations given
to us, the Company has not defaulted in the repayment of loans or borrowings from a
financial institutions and banks.
10. FUNDS RAISED AND UTILIZATION
Based upon the audit procedures performed and the information and
explanations given by the management, the company has not raised moneys by way of initial
public offer or further public offer (including Debt instruments). During the year the
Company has taken Term Loans from Banks and utilized the amount of Term Loans for the
purpose for which they were raised. The company has not made any preferential allotment or
private placement or shares or fully or partly convertible debentures during the year
under review.
11. FRAUD & WHISTLE-BLOWER COMPLAINTS
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.
12. NIDHI COMPANY
In our opinion, the Company is not a Nidhi Company. Therefore, the
provisions of clause xii of the Order are not applicable to the Company.
13. RELATED PARTY TRANSACTIONS
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.
14. INTERNAL AUDIT
The company does have an internal audit system commensurate with the
size and nature of its business. Reports of internal audit committee for the period under
audit were considered by the statutory auditor.
15. NON-CASH TRANSACTIONS
Based upon the audit procedures performed and the information and
explanations given by the management, the company has not entered into any non-cash
transactions with directors or persons connected with him and the provisions of section
192 of Companies Act, 2013 have been complied with.
16. REGISTRATION UNDER RBI ACT
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 and hence not commented upon.
17. CASH LOSSES
The Company has not incurred cash losses in the financial year under
Audit and in the immediately preceding financial year.
18. RESIGNATION OF STATUTORY AUDITORS
There has been no instance of any resignation of the statutory auditors
occurred during the year.
19. MATERIAL UNCERTAINTY ON MEETING LIABILITIES
No material uncertainty exists on the date of the audit report that
company is capable of meeting its liabilities existing at the date of Balance Sheet as and
when they fall due within a period of 1yr.( One Year) from the Balance sheet date.
20. TRANSFER TO FUND SPECIFIED UNDER SCHEDULE VII OF COMPANIES ACT,
2013
In respect of ongoing projects, the company has transferred unspent
amount of Rs. 2931387 to a account for unspent CSR within a period of thirty days from the
expiry of the financial year in Compliance with provisions of Section 135 of the said Act.
21. REMARKS OF SUBSIDIARY COMPANY
The Company does not have any qualifications or any adverse remarks by
the auditors of its subsidiary company GNA Axles Inc., Michigen.
"ANNEXURE B"
TO THE INDEPENDENT AUDITORS
"Annexure B" to the Independent Auditors Report of even date
on the Standalone Financial Statements of GNA Axles Limited 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 GNA AXLES LIMITED ("the Company" as of March 31, 2023 in
conjunction with our audit of the standalone 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 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. 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.
AUDITORS RESPONSIBILITY
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, 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 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 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 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 financial statements for external purposes in accordance
with generally accepted accounting principles. A companys internal financial control
over financial reporting 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 authorizations of
management and directors of the company; and (3 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 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, 2023, based
on the Internal Control over financial reporting criteria established by the company
considering the essential components of the 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 HARISH & CO. |
|
Chartered Accountants (FRN: 017372N) |
|
(SURAJ BAJAJ) |
|
Partner |
| Place: Jalandhar |
M. No.538094 |
| Date: May 1,2023 |
UDIN: 23538094BGXWVT6944 |
+91-9892691696
