Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Gopala Polyplast Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss, Cash Flow Statement and the Statement of Change in Equity for the year the ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Ind AS Financial Statements
The Company’s Management is responsible for the matters states in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance, cash flows and changes in equity statement of the Company in accordance with the Accounting principles generally accepted in India, including the Accountant Standards (Ind AS) referred to in section 133 of the Act read with rule 7 of the Companies (Accounts) Rules 2014. This responsibility 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 judgements and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial control that we are operating effectively for ensuring the accuracy and completeness of 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. 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 perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the Ind AS financial statements 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 management, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Basis for Qualified Opinion
1. The present liability for future payment of gratuity as on March 31, 2018 is not actuarially determined and provided for as per Indian Accounting Standard - 19 (Ind AS 19), “Employee Benefits” and also as per the provisions of section 128 of the Companies Act, 2013 relating to preparation of books of account on accrual basis. The Company has provided for the amount of gratuity liability for the employees on the basis of management’s estimate. In the absence of actuarial valuation report, the quantum of short provision of gratuity and its impact on the Statement of Profit and Loss for the period ended March 31, 2018 cannot be determined.
2. The borrowings have not been shown on amortised cost method as required under Ind AS. Hence the same are not subsequently measured using the EIR method as per Ind AS 109.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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:
a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2018;
b) in the case of the Statement of Profit and Loss, of the Profit (including other comprehensive income) for the year ended on that date;
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date; and
d) in the case of the Statement of Change in Equity, of the change in equity for the year ended on that date.
Other Matter
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by V. K. Moondra & Co., whose report for the year ended March 31, 2017 and March 31, 2016 dated May 22, 2017 and May 20, 2016 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us. Our opinion is not modified in respect of these matters.
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) 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 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 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 effects of the matter described in the Basis for Qualified Opinion paragraph above, 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
c) The Balance Sheet, Statement of Profit and Loss (including other comprehensive income), Cash Flow Statement and Statement of Change in Equity dealt with by this Report are in agreement with the books of account.
d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the Ind AS financial statements comply with the Accounting Standards (Ind AS) referred to in section 133 of the Companies Act, 2013 read with rule 7 of Companies Accounts Rules 2014
e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164(2) of the Companies Act, 2013.
f) With respect to the adequacy of the internal finance controls over financial reporting of the Company and the operating effectiveness of such control, refer to our separate Report in “Annexure-B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit & Auditors) Rules 2014, in our opinion and to the best of our information and according to explanations given to us by the management, the requirements of the same are duly complied with as under:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements by way of disclosure in CARO reporting and notes to accounts.
ii. Provision has been made in the standalone Ind AS financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The Company has already provided requisite disclosure as to holdings and dealings in Specified Bank Notes during period from 08.11.2016 to 30.12.2016 in Audited financials for the financial year ending March 31, 2017.
Annexure to the Auditors’ Report
The Annexure-A referred to in our report to the members of the above Company for the year Ended on March 31, 2018. We report that:
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S.No.
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Particulars
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Auditors Remark
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(i)
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(a) whether the Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;
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Yes
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(b) whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;
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Yes, no discrepancies noticed.
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(c) Whether title deeds of immovable properties are held in the name of the Company. If no, provided details thereon.
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Yes
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(ii)
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(a) whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so, how they have been dealt with in the books of account;
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Yes, no material discrepancies were noticed
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(iii)
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Whether the Company has 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 Companies Act.
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No loans given to parties covered in the register maintained under section 189
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(a) Whether the terms and conditions of the grant of such loans are prejudicial to the Company’s interest;
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Not Applicable
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(b) Whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayment or receipts are regular.
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Not Applicable
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(c) If the amount is overdue, state the total amount overdue for more than ninety days and whether reasonable steps have been taken by the Company for recovery of the principal and interest:
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Not Applicable
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(iv)
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In respect of loans, investments and guarantees, whether provision of section 185 and 186 of the companies’ act, 2013 have been complied with. If not, provide details thereof.
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Yes
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(v)
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In case the Company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act,2013 and the rules framed there under, where applicable, have been complied with? If not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?
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No such deposits accepted
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(vi)
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where maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 whether such accounts and records have been made and maintained;
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Not Applicable
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(vii)
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(a) Is the Company regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor.
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The Company is Generally regular as per explanation given to us, except Excise Duty Payment of Rs. 10.08/- lakhs.
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(b) Where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax or have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute).
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No such dues pending, except as per below table
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Name of statute
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Nature of Dispute
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Demand Amount (Rs.)
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Period to Which Dispute Relates
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Forum where Dispute is Pending
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Income Tax Act
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Various addition u/s 143(3) of I.T Act
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Nil
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A.Y
2010-11
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I.T.A.T., Ahmedabad
(Department’s
Appeal)
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Excise Dept.
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Central excise duty u/s 11A and penalty under section 11 AC of Central Excise Act,1944
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Rs. 478.25 Lakh towards duty and interest under section 11AA & penalty u/s 11AC on the above.
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F.Y 2010-11 to
2014-15 (Bro ken Period)
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Honorable High Court of Gujarat
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Excise Dept.
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Utilization of cenvat credit
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Rs. 116.63 Lakh towards duty & 116.63 towards penalty u/s 11AC
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F.Y 2014-15
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Honorable High Court of Gujarat
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Excise Dept.
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Central excise duty u/s 11A and penalty under section 11 AC of Central Excise Act,1944
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Rs. 2681.25 Lakh towards duty and interest under section 11AA & penalty u/s 11AC on the above.
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F.Y. 2010-11 to
2014-15
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Settlement
Commission, Mumbai
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(viii)
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Whether the Company has defaulted in repayment of dues to a financial institution, bank, government or dues to debenture holders? If yes, the period and amount of default to be reported; (in case of defaults to banks, financial institute and government, lender wise details to be provided).
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No such default
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(ix)
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Whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those raised. If not, the details together with delay / default and subsequent rectification, if any, as may be applicable, be reported.
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Not applicable
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(x)
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Whether any fraud by the Company or any fraud on the Company by its officer/ employees has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated.
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No such instance as per audit procedures and management explanations.
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(xi)
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Whether managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act? If not, state the amount involved and steps taken by the Company for securing refund of the same.
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Yes
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(xii)
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Whether all transactions with the related parties are in compliance with Section 188 and 177 of Companies Act, 2013 where applicable and the details have been disclosed in the Ind AS Financial Statements etc as required by the accounting standards and Companies Act, 2013.
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Yes
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(xiii)
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Whether the Nidhi Company has complied with Net Owned Funds to Deposit Ratio of 1: 20
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Not applicable
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(xiv)
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Whether the Company has made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of Section 42 of the Companies Act, 2013 have been complied and the amount raised have been used for the purposes for which the funds were raised. If not, provide details thereof of amount involved and nature of noncompliance.
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The Company has called EGM on 25th March, 2017 for the purpose of issuance of share warrant on preferential allotment basis to investor- non promoter (Public Category). Rs. 15 lakh equity shares@ Rs. 10 per share (face value) and Rs. 50/- per share (Premium). 25% of share warrant money received in April, 2017 and used for working capital.
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(xv)
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Whether the Company has entered into any non-cash transactions with directors or persons connected with him and if so, whether provisions of Section 192 of Companies Act, 2013 have been complied with.
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No Such Transactions made
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(xvi)
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Whether the Company is required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934, and if so, whether the registration has been obtained.
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Not Applicable
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Annexure - B to Independent Auditors’ Report
Referred to in paragraph 10(f) of the Independent Auditors’ Report of even date to the members of Gopala Polyplast Limited on the Ind AS financial statements for the year ended 31st March, 2018.
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 Gopala Polyplast Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s 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 (the “Guidance Note”). 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 Company’s 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 Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with 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 and 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 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, 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 procedure selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the Ind AS 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 Company’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that,
(1) Pertain to the maintenance of records that, in reasonable details, 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 Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorities 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 Company’s assets that could have a material effect on the Ind AS 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, 2018, based on 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 Ashok Dhariwal & Co.
Chartered Accountants
(Registration No. 100648W)
Place: Ahmedabad (CA Ashok Dhariwal)
Date : 18/05/2018 Partner
Membership No. 36452
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