Godawari Power & Ispat Ltd Directors Report.

To the Members of Godawari Power & ispat Limited

Report on the Audit of the standalone ind As Financial statements

Opinion

We have audited the standalone Ind AS financial statements of Godawari Power & ispat Limited (the Company), which comprise the balance sheet as at 31st March, 2019, and the statement of Profit and Loss, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of 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 standalone 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, of the state of affairs of the Company as at 31st March, 2019, and profit/loss, changes in equity and its cash flows for the year ended on that date

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) 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 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 Companies Act, 2013 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.

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.

Managements Responsibility for the standalone 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 standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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 statement 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.

Those 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.

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. 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), the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;

(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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and

(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 standalone Ind AS financial statements - Refer Note 29 to the standalone 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; and

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For JDS & Co.
(Firm Regn. No.018400C)
Chartered Accountants
Sanjay Dewangan
Partner
Membership Number: 409524
Raipur, 30th April, 2019

ANNEXURE - A TO THE AUDITORS REPORT

The Annexure referred to in Independent Auditors Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31st March, 2019 we report that:

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, all major assets except certain low value items viz furniture & fixtures and office equipment have been physically verified by the management at reasonable intervals. According to the information and explanation given to us, no material discrepancies were notice.

(c) The title deeds of immovable properties, as disclosed in Note 3 on fixed assets to the financial statements, are held in the name of the Company except the immovable properties transferred on amalgamation of the erstwhile RR Ispat Limited and Hira Industries Limited held in their name.

(ii) As explained to us, the physical verification of inventories have been conducted at reasonable intervals by the management during the year. In our opinion, the frequency of the verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) The company has granted unsecured loans and advances to two companies covered in the register maintained under section 189 of the companies Act, 2013 during the year. According to the information and explanations given to us and based on the audit procedures conducted by us, we are of the opinion that:

(a) The terms & conditions of the grant of such loan are not prejudicial to the interest of the Company.

(b) As explained to us the principal amounts are repayable on demand, whereas the interest is payable annually at the discretion of the Company and the repayments or receipts are regular.

(c) Since the amount outstanding is not overdue, therefore, the provisions of clause 3 (iii)(c) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

(iv) In our opinion and according to the information & explanations given to us, the Company has compiled with the provisions of Section 186 of the Companies Act, 2013 in respect of the loans and investment made, and guarantees and security provided by it. The Company has not granted any loans and made any investments, or provided any guarantees or security to the parties covered under Section 185 of the Companies Act, 2013.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from public, in terms of the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and rules framed thereunder; therefore the provisions of clause 3(v) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

(vi) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, in respect of Companys products 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.

(vii) (a) According to the information & explanations given to us, during the year the company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, goods & services tax, duty of customs, sales tax, cess and any other statutory dues with the appropriate authorities. Further, no undisputed amounts of statutory dues as stated above were in arrears as at 31st March, 2019 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, service tax, goods & services tax, custom duty, excise duty, value added tax and cess which have not been deposited on account of any dispute except the following:

name of statute nature of dues period Amount (र in lacs) Forum where dispute is pending
Central Excise Act,1944 Disallowance of Duty on Structural items (Cement) 2008- 09 to 2009- 10 31.30 High Court of CG at Bilaspur.
Central Excise Act,1944 Demand on account of Cenvat credit denial 2007-08 11.12 Addl. Commissioner, Central Excise, Raipur
Service Tax Disallowance of Service Tax credit on Iron Ore not received after crushing 2009- 10 to 2010- 11 4.18 Assistant Commissioner, Central Excise, Raipur
Central Excise Act,1944 Disallowance of Duty on Structural items (Other than Cement) 2008- 09 to 2009- 10 111.12 High Court of CG at Bilaspur.
Central Excise Act,1944 Duty on Sale of Power to CSEB and on Output Service 2010-11 to 2014-15 187.82 CESTAT, NEW DELHI
Service Tax Demand of Service Tax on recovery of Incidental charges HIL 2005- 06 to 2006- 07 102.92 CESTAT, NEW DELHI
Service Tax Disallowance of Cenvat Credit of Service Tax paid on Industrial & Commercial Construction Service April 11 to Nov 15 67.29 Addl. Commissioner, Central Excise, Raipur
Service Tax Demand of Service Tax-Suppression of value- retention of Iron ore fines HIL 2011-12 119.23 CESTAT, NEW DELHI

 

Name of Statute Nature of Dues Period Amount (र in lacs) Forum where dispute is pending
Service Tax Disallowance of Cenvat Credit of Service Tax paid on Industrial & Commercial Construction Service Dec 15 to Aug 16 6.55 Addl. Commissioner, Central Excise, Raipur
Customs Act, 1962 Demand of Customs duty on imported Coal due to classified as Bituminous Coal 2012-13 10.00 CESTAT, HYDERABAD
Central Excise Act,1944 Demand on account of excess Cenvat credit passed on by buyer 2013-14 to 2015-16 59.16 The Commissioner (Appeals) Raipur
Central Excise Act,1944 Demand of duty on related party transaction 2004-05 3.12 CESTAT, NEW DELHI
Service Tax Demand of ST on charges relating to ECB Loan availed - Penalty U/s 77& 78 2006-07 to 2011-12 119.88 CESTAT, Bangalore
Service Tax ST Credit availment on loading/handling, testing of fines HIL 2012- 13 to 2013- 14 0.84 The Commissioner (Appeals) Raipur
Central Excise Act,1944 Denial of Cenvat credit on inputs April 08 to Feb 09 16.68 Commissioner Central Excise, Raipur.
Central Excise Act,1944 Denial of Cenvat credit on inputs May 15 to Nov 15 1.00 The Commissioner (Appeals) Raipur
Service Tax Reversal of ST Credit on removal of inputs RRI July, 2015 to March,2016 0.10 The Commissioner (Appeals) Raipur
Service Tax Denial of Service Tax credit on Works Contract Service 2015- 16 & 2016- 17 19.06 Addl. Commissioner, Central Excise, Raipur
Service Tax ST credit on General Insurance 2012-13 to 2015-16 1.78 CESTAT, NEW DELHI
C.G. Commercial Tax Non receipt of sales tax declaration form 2010-11 & 2011-12 13.92 Chhattisgarh Commercial Tax Tribunal, Raipur
C.G. Commercial Tax Non receipt of sales tax declaration form 2007-08 262.93 Appellate Addl. Commissioner, Raipur
Chhatisgarh Upkar Adhiniyam 1981 Energy Development Cess May 2006 to Feb 2014 3279.08 Supreme Court

(viii) Based on our audit procedures, and according to the information and explanations given to us, during the year, the company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or debenture holders as at the balance sheet date.

(ix) The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments). As the company has not raised any term loan during the year, therefore, the provisions of clause 3(IX) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

(x) In our opinion and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year. Therefore, the provisions of clause 3(X) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

(xi) The Company has provided for managerial remuneration during the year in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Companies Act, 2013.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Therefore, the provisions of clause 3(xii) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, wherever applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.

(xiv) 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, the provisions of clause 3(xiv) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

(xv) The Company has not entered into any non-cash transactions as referred in Section 192 of the Act with its directors or persons connected with him. Therefore, the provisions of clause 3(xv) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Therefore, the provisions of clause 3(xvi) of the Companies (Auditors Report) Order, 2016 are not applicable to the company.

For JDs & Co.
(Firm Regn. No.018400C)
Chartered Accountants
Sanjay dewangan
Partner
Membership No.409524
Raipur, 30th April, 2019