To the Members of
Shri Gang Industries & Allied Products Limited Delhi
Report on the Financial Statements
We have audited the accompanying financial statements of
Shri Gang Industries & Allied Products Limited Delhi (“the
Company”), which comprise the Balance Sheet as at June 30,
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Statement of Profit & Loss and Cash Flow Statement
for the year ended on that date and a summary of significant
accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
The company’s 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
to 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 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 of the assets of the Company and
for preventing and detecting frauds and other irregularities,
selection and application of appropriate accounting policies,
making judgment 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken in to account the
provisions of the Act and the Rules made thereunder including
the Accounting Standards and matters which are required
to be included in the audit report. We conducted our audit in
accordance with the Standards on Auditing specified under
section 143(10) of the Act and other applicable authoritative
announcement issued by the Institute of Chartered Accountants
of India. Those Standards and pronouncements 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 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 auditor’s
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 Company’s
preparation of the financial statements that give a true and fair
view, 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 in 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 the Company’s 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 qualified
audit opinion.
Matter for Emphasis
Attention of the members is drawn to-
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With reference to note no 6 & 11, these accounts have
been prepared without any provision of interest, if any,
payable on the overdue amount of interest free loan in
lieu of Trade Tax of Rs.446.00 lacs from PICUP. In the
absence of any documentary evidences, we are not in a
position to state / qualify whether any interest is payable
on such amounts.
With reference to note no 7 & 11, these accounts have
been prepared without any provision of interest, if any,
payable to Government of UP on overdue deferred Trade
Tax & Power Charges amounting to Rs.3657.22 lacs. In
the absence of any documentary evidences, we are not in
a position to state / qualify whether any interest is payable
on such amounts.
Note no 23 to these accounts to the facts that the
company suspended its manufacturing activities since
25.03.2010 and accordingly declared ‘lay off’ for indefinite
period and board has not yet made out any detailed plan.
Such long suspended activities coupled with the fact that
the company’s accumulated losses have exceeded its net
worth, indicates the existence of a material uncertainty
about the company’s ability to recommence its operations
and severally affecting the ‘going concern assumption’.
However, these accounts have been prepared by the
management on ‘going concern assumption’ in view of the
pending reference before BIFR under the Sick Industrial
Companies (Special Provisions) Act, 1985 as explained in
note 23.
Basis for Qualified Audit Opinion
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Attention is drawn that the inventories of Rs.135.13 lacs
includes Stores, Spares & Packing Material, which in the
absence of physical verification may not be realized at the
values shown in these financial statements and for which
no provision for its impairment in its value, if any is made.
Accordingly the losses for the current year and accumu-
lated losses are shown less and current assets are shown
in excess of Rs.135.13 lacs.
Attention is drawn that the Capital Work in Progress of
Rs.9.96 lacs, which has not yet been
Completed and commissioned, may not be realized at the
values shown in these financial statements and for which
no provision for its impairment in its value, if any is made.
Accordingly the losses for the current year and accumu-
lated losses are shown less and non current assets are
shown in excess of Rs.9.96 lacs.
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Interest on unpaid overdue Public Deposits of Rs.30.00
lacs for the year has not been provided for amounting to
Rs.3.00 lacs (accumulated Rs.15.00 lacs approx. up to
date of Balance Sheet). Accordingly loss for the current
year and accumulated losses are less and current liabili-
ties are also less by Rs.15.00 lacs.
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In the absence of adequate documentation and docu-
mentary proofs, we are unable to comment whether there
is any impairment in the value of the fixed assets due to
efflux of time and suspension of manufacturing activities
since March 2010 and requirement of provision for the
same, which might be required to be provided for. In the
absence of adequate records and any proofs of physical
verification, the discrepancies, realizable/salvage value,
the impact of impairment can not be ascertained.
Opinion
In our opinion and to the best of our information and according
to the explanations given to us, subject to the matters of
emphasis and except for the effects of the matters described in
Basis for Qualified Opinion paragraph, 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:
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in the case of the Balance Sheet, of the state of affairs of the
Company as at June 30, 2015;
in the case of the Statement of Profit & Loss, of the Profit for
the year ended on that date, and
in case of Cash Flow Statement, cash flow for the year
ended on that date.
Report on Other Legal and Regulatory Requirements:
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As required by the Companies (Auditor’s Report) Order,
2015 (“the Order”) issued by the Central Government of
India in terms of sub-section (11) of section 143 of the
Act, and on the basis of such checks of the books and
records of the Company as we consider appropriate and
according to the information and explanations given to us,
we enclose in the Annexure, a statement on the matters
specified in paragraphs 3 and 4 of the said order.
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As required by section 143(3) of the Act, we report that:
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We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purpose of our audit;
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;
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The Balance Sheet , the Statement of Profit & Loss and
Cash Flow Statement dealt with by this report are in
agreement with the books of accounts;
Except for the effects of the matter described in the
Basis for Qualified Opinion paragraph, in our opinion, the
Balance Sheet, the Statement of Profit and Loss and Cash
Flow Statement comply with the Accounting Standards
specified in Section 133 of the Act; read with Rule 7 of the
Companies (Accounts) Rules, 2014.
On the basis of written representation received from the
Directors as on June 30, 2015 and taken on record by the
Board of Directors, we report that none of the Directors is
disqualified as on June 30, 2015 from being appointed as
a Director in terms of section 164(2) of the Act.
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With respect to the other matters to be included in the
Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules 2014, in our
opinion and to the best of our knowledge and belief and
according to the information and explanations given to us-
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The Company has disclosed the impact of
pending litigations as at June 30, 2015 on its
financial position in its financial statements.
The Company has made provision as at June
30, 2015, as required under the applicable law or
accounting standards, for material foreseeable
losses, if any, on long term contracts including
derivative contracts.
There has been no delay in transferring amounts,
required to be transferred, to the Investor
Education and Protection Fund, if any by the
Company during the year ended June 30, 2015.
For Satendra Rawat & Co
Chartered Accountants
FRN- 008298C
(CA. Satendra Rawat)
Partner
Membership No. - 074126
Date: 28.08.2015
Place: New Delhi