Shree Ganesh Forgings Ltd Directors Report.

To the Members of

SHREE GANESH FORGINGS LIMITED

1. Report on Financial Statements :

We have audited the accompanying financial statements of SHREE GANESH FORGINGS LIMITED as at March 31, 2019 which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit & Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. Managements Responsibility for the Financial Statements :

Management and Board of Directors of the Company are responsible for the matters stated in section 134(5) of the Companies Act 2013 with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flow of the company in accordance with the accounting principles generally accepted in India including Accounting Standards specified under section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014. The responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentations of the financial statements that gives a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provision of the Companies Act, 2013, the accounting and auditing standards and matters which are required to be included in the Audit Report under the provisions of the act and rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Companies Act, 2013. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

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 judgement, including the assessment of the risks of material misstatements of the financial statements whether due to fraud or error. In making those risk assessment, the auditor considers internal financial control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by company management, 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.

4. Basis for Qualified Opinion

a) The company was not able to produce the fixed deposit receipts, The banks are not cooperating to provide any conformations of balances as the matter is pending with DEBTS RECOVERY TRIBUNAL COURT, MUMBAI. Thus we are not able to comment on the actual balances.

b) Impairment of assets not done as per Accounting Standard (AS) 28 Impairment of Assets, the impact of such impairment is not ascertainable.

c) Bank balance conformations have not been provided to us during the audit hence we are unable to comment on the actual balances and the consequent impact on the loss & reserve of the company. The banks are not cooperating to provide any conformations of balances as the matter is pending with DEBTS RECOVERY TRIBUNAL COURT, MUMBAI.

d) Advance due from certain parties which, in our opinion, are considered doubtful of recovery against which adequate provision has not been made.

e) The Company has failed to provide necessary information and data and has not disclosed the impact of pending litigation as on 31st March 2019 on its financial position in its financial statement.

f) Balance conformation for Trade receivable (Debtors) and other receivable (Advance to creditors) have not been provided as no suppliers are showing their interest to cooperate us during the audit hence we are not able to comment on the actual balance & the consequent impact on the loss & reserve of the company.

g) Depreciation as per the new schedule III of Company Act 2013 has not been calculated an accounted due to non-availability of passed data of addition of fixed assets.

h) Mr. Deepak Sekhri & Mrs. Anita Sekhri the directors of the company are disqualified as on 31.03.2019 from being appointed as directors in terms of section 164(2) of the Companies Act. The directors have filed an appeal before the NCLT for restoration of DIN

5. Opinion:

In our opinion and to the best of our information and according to the explanations gives to us, the aforesaid 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.

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2019;

(b) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date

6. Key Audit Matters:

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No. Key Audit Matter Auditors Response
1 Material Uncertainty related to going concern Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive procedures, as follows:-
We draw attention to the financial statements, which indicate that the company has incurred a net loss of Rs.5,41,56,349/- during the year ended 31.03.2019 and as of the date the companies liabilities exceeds its total assets by Rs.86,24,04,111/-. As stated in the financial statements these events or conditions, along with other matters as set forth indicate that a material uncertainty exists that may cast significant doubt on the companys ability to continue as a going concern. • In case performance obligations were not met, whether the consequential impact as envisaged under income recognition, asset classification and provisioning norms in the said Directions were reflected in the books of accounts by the Company.
Our opinion is not modified in respect of this matter.

7. Emphasis of Matters

We draw you attention to the following matters in the Notes to the financial statements:

a) The financial statements indicate that the company has accumulated losses and its net worth has been substantially eroded; the company has incurred net loss during the current and previous year. These conditions, along with other matters set forth in note, indicate the existence of a material uncertainty that may cast significant doubt about the companys ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis. Our opinion is not modified in respect of these matters.

b) Loan of State Bank of Hyderabad and State Bank of Patiala have been transferred by the bank to Asset reconstruction company. This ARC has assigned the liability of payment of these loans to the Guarantor of Shree Ganesh Forgings Ltd at a reconstructed amount. This does not have any impact or adjustment to the financial statement during the year.

c) The company has made proposal for one time settlement with State Bank of Hyderabad and State Bank of Patiala which was agreed by the bank authorities.

d) State Bank of India in terms of SARFAESI Act has taken possession and taken over the control of land, building and other fixed assets along with stocks etc. lying in the factory premises of the company situated at C-3/C, TTC Industrial Area, Thane Belapur Road, Pawane, Navi Mumbai.

8. Report on other Legal and Regulatory Requirements:

1. As required by the Companies (Auditors Report) Order, 2017 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013 (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) Except for the possible effect of the matter describe in the basis for qualified opinion paragraph above, in our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books.

c) 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.

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules 2014;

e) The matter describe in the basis for qualified opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the company.

f) On the basis of written representations received from the directors as on March 31, 2019, taken on record by the Board of Directors, Mr. Deepak Sekhri & Mrs. Anita Sekhri the directors are disqualified as on March 31, 2019, from being appointed as a director in terms of Section 164(2) of the Act. The directors have filed an for restoration of DIN.

g) With respect of adequacy of the internal financial control over financial reporting of the company and the operative effectiveness of such control, refer to our separate report in Annexure-B.

h) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditors Report in accordance with rule 11 of the Companies (Audit & Auditors) Rules, 2014.

a. The Company has failed to provide the necessary information and data and has not disclosed the impact of pending litigations as on 31.03.2019 which would impact its financial position.

b. The Company did not have any long term contracts including derivative contracts, as such the question of commenting on before the NCLT any material foreseeable losses thereon does not arise.

c. The company has failed to transfer unpaid / unclaimed dividend amounting to Rs.1,83,958/- and share application money amounting to Rs.1,54,786/- to the Investor Education and Protection Fund..

For R. K. CHAUDHARY & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO.133512W
(R. K. CHAUDHARY)
PLACE: MUMBAI PROPRIETOR
DATE: 22/05/2019 M.NO. 035487

ANNEXURE-A TOINDEPENDENT AUDITORS REPORT

Referred to in paragraph 11 (f) of the Independent auditors Report of even date to the members of SHREE GANESH FORGINGS LIMITED on the Standalone financial statement for the year ended March 31, 2019

Report on the Internal Financial Control Under Clause (i) of Sub-Section 3 of Section 143 of the Act.

We have audited thefinancial control over financial reporting of SHREE GANESH FORGINGS 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 the date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible of 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 (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial control 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 & detection of frauds & errors, the accuracy & completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial control 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") & the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial control, both applicable to an audit of internal financial control and both issued by the ICAI. Those Standards & the Guidance Note required that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial control over financial reporting was established & 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 control system over financial reporting obtaining an understanding of internal financial control over financial reporting, assessing the risk that material weakness exists, & testing & evaluating the design & operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient & appropriate to provide a basis for our audit opinion on the Companys internal financial controls systems over financial reporting

Meaning of Internal Financial Control 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 & the preparation of financial statements for external purpose in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting included those policies & procedures that

a) Pertain to the maintenance of records that, in reasonable detail, accurately & fairly reflect the transaction & disposition of the assets of the company.

b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accounting principles, & the receipts & expenditures of the company are being made only in accordance with authorizations of management & directors of the company.

c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the companys assets that could have as material effect on the financial statements.

Inherent Limitation of Internal Financial Controls over Financial Reporting

Because of the inherent limitation 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, projection of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of change in conditions, or that the degree of compliance with the policies or procedure may deteriorate.

Disclaimer of Opinion

According to the Information & explanations given to us, the Company has not established its internal financial controls over financial reporting on criteria considering the essential components of internal controls stated in the Guidance Note on Audit of internal financial control over financial Reporting issued by the Institute of Chartered Accountants of India , even though the Company has existing internal standard operating procedure & manuals for its various function prepared in accordance with the operational functionality of the industry in which the company operates. Because of the reason, we are unable to obtain sufficient appropriate audit evidence to provide a basis for the opinion whether the company had adequate internal financial control over financial reporting and whether such internal financial control over operating effectively as at 31st March, 2019.

We have considered the disclaimer reported above along with implemented checks and balances for various functions of the company of the company in determining the nature, timing and extent of audit tests applied in our audit of the financial statements of the company, & the disclaimer does not affect our opinion on the financial statement of the

For R. K. CHAUDHARY & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO.133512W
(R. K. CHAUDHARY)
PLACE: MUMBAI PROPRIETOR
DATE: 22/05/2019 M.NO. 035487

ANNEXURE-B TO INDEPENDENT AUDITORS REPORT

With reference to the annexure referred in the Auditors Report to the members of the company on the financial statement for the year ended 31.03.2019 and on the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that

1. (a) The Company has maintained proper records showing particulars, including quantitative details and situation of its fixed assets;

(b) As explained to us all the fixed assets, according to the practice of the Company are physically verified by the Management at reasonable intervals, in a phased verification-programme, which, in our opinion, is reasonable, looking to the size of the Company and the nature of its business.

(c) The Company has not disposed off any of its Fixed Assets so as to affect its going concern;

(d) According to the information and explanation given to us and on the basis of our examination of the records of the company, the Title Deeds of all immovable properties are in the name of the company.

2. None of the Fixed Assets of the Company have been revalued during the year.

3. We have not been able to physically verify the inventory due to the fact that the possession of the factory premises was taken over by State Bank of India on 02/01/2018.

4. The Company has not produced any register required to be maintained under Section 189 of the Companies Act, 2013.

5. In our opinion and according to the information and explanations given to us, the company has complied with the Provisions of Section 185 & 186 of the Companies Act, 2013 with respect to the loans & investment made.

6. The Company has not accepted any deposits from the public during the year.

7. As informed to us, the Central Government has prescribed maintenance of cost record under sub section (1) of section 148 of the Act in respect of the Companies products.

8. According to the information and explanations given to us and based on the records of the company examined by us, the Company is not regular in depositing the undisputed statutory dues including, Income Tax, Sales Tax, Service Tax and other material statutory dues, as applicable, with the appropriate authorities in India

Head Assessment Year Amount in Rupees
NMMC CESS 2012-13 10,50,184
Property Tax 2012-13 44,68,088
Property Tax 2013-14 29,80,392
Property Tax 2014-15 33,94,170
Property Tax 2015-16 1,60,05,747
Property Tax 2016-17 76,40,045
Property Tax 2017-18 84,57,912
Property Tax 2018-19 92,72,512
CST 2013-14 1,56,580
CST 2017-18 1,12,655
VAT 2015-16 48,44,942
VAT 2016-17 1,32,202
TCS 2018-19 51,579
TDS 2018-19 7,74,752
Income Tax 2006-07 1,85,25,222
Income Tax under Appeal 2014-15 2,33,40,850

9. The Company has not borrowed any loans from Financial Institution, Bank or Government.

10. The Company has not made any initial public offer.

11. The Company has not noticed any fraud by it officers or employees.

12. The Company has not paid any Managerial Remuneration.

13. The Company is not a Nidhi Company.

14. We observed that inventory includes (Stores, Spares & Loose Tools) are non moving items because that value shown in the Balance Sheet is more than 10 years old.

15. All the transactions with related parties are in compliance with section 177 & 188 of the Companies Act, 2013.

16. The Company has not made any preferential allotment or private placement of shares.

17. The Company has not entered to any non cash transaction with directors or persons connected with them.

18. The Company has accumulated losses at the end of the financial year and has incurred cash losses, both, in the financial year under report and the immediately preceding financial year.

19. In our opinion and according to the information and explanations given to us, the Company has not raised any term loans during the year.

20. The company is not a Non-Banking Financial Institution U/s.45-IA of the Reserve Bank of India Act, 1934.

For R. K. CHAUDHARY & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO.133512W
PLACE: MUMBAI (R. K. CHAUDHARY)
DATE: 22/05/2019 PROPRIETOR
M.NO. 035487