TO THE MEMBERS OF GRAUER & WEIL (INDIA) LIMITED
Report on the Audit of the Standalone financial statements
We have audited the accompanying standalone financial statements of Grauer &Weil (India) Limited ("the Company") which comprise the Balance Sheet as atMarch 312019 the Statement of Profit and Loss (including other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year thenended and a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 asamended and other accounting principles generally accepted in India of the state ofaffairs (financial position) of the Company as at March 312019 and its profit (financialperformance including other comprehensive income) the changes in equity and its cashflows for the year ended on that date.
2. Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the independence requirements that are relevantto our audit of the Standalone financial statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.
3. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
|Sr. No. ||Key Audit Matter ||Our Response |
|1 ||Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) ||Principal Audit Procedures |
| ||The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations effect of variable considerations and the appropriateness of the basis used to recognise revenue at a point in time or over a period of time. ||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. |
| || ||Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
| || ||Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
| || ||Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. |
| || ||We carried out a combination of procedures involving enquiry and observation re-performance and inspection of evidence in respect of operation of these controls. |
| || ||Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard. |
| || ||Our procedures did not identify any material exceptions. |
|2 ||Defined benefit obligation ||We have examined the key controls over the process involving member data formulation of assumptions and the financial reporting process in arriving at the provision for retirement benefits. |
| ||The valuation of the retirement benefit schemes in the Company is determined with reference to various actuarial assumptions including discount rate future salary increases rate of inflation mortality rates and attrition rates. Due to the size of these schemes small changes in these assumptions can have a material impact on the estimated defined benefit obligation ||We tested the controls for determining the actuarial assumptions and the approval of those assumptions by senior management. We found these key controls were designed implemented and operated effectively and therefore determined that we could place reliance on these key controls for the purposes of our audit. |
| || ||We tested the employee data used in calculating the obligation and where material we also considered the treatment of curtailments settlements past service costs re-measurements benefits paid and any other amendments made to obligations during the year. |
| || ||From the evidence obtained we found the data and assumptions used by management in the actuarial valuations for retirement benefit obligations to be appropriate. |
4. Information Other than the Standalone Financial Statements and Auditor's Reportthereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Management Discussion and Analysis Reporton Corporate Governance but does not include the standalone financial statements and ourauditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained 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 materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
5. Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the Ind AS and other accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
6. Auditor's Responsibility for the audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained upto the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
7. Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give inAnnexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
As required by Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASprescribed under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 from being appointed as a director in terms of Section 164 (2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended. In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 33(A) to the Standalonefinancial statements;
ii. The Company has long-term contracts including derivative contracts for which therewere no material foreseeable losses; and
iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
For SCA & ASSOCIATES
(Firm Registration No.l0II74W)
Date: May 16 2019
"ANNE XU RE A" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF GRAUER & WEIL (INDIA) LIMITED
i) In respect of its Fixed Assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets;
b) As explained to us the assets have been physically verified by the management inaccordance with a phased programme of verification which in our opinion is reasonableconsidering the size and the nature of its business. The frequency of verification isreasonable and no material discrepancies have been noticed on such physical verification.
c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties are heldin the name of the Company.
ii) The inventory excluding goods-in-transit has been physically verified by themanagement during the year. In our opinion the frequency of verification is reasonable.No material discrepancies were noticed on such physical verification. As regards materialslying with third parties confirmations have been obtained;
iii) The Company has not granted any loans secured or unsecured during the year tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Act. Accordingly the clauses 3(iii) (a) (b) and (c)of the Order are not applicable to the Company. However in respect of a loan given to anassociate company in an earlier year the receipt of interest is regular. There is nostipulation regarding repayment of principal amount.
iv) The Company has not granted any loan neither made any investments nor given anyguarantee or security during the year covered by the provisions of Sections 185 and 186of the Act. However the company has complied with the provisions of sections 185 and 186of the Act in respect of loans advance to subsidiaries/associates and investments madetherein.
v) The Company has not accepted any deposits within the meaning of Provisions ofSection 73 to 76 of the Act and the rules framed thereunder from the public.
vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148 (1) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained.
vii) a) The Company is regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Service Tax Goods and Servicestax Duty of Customs Duty of Excise Value Added Tax Cess and any other statutory dueswith appropriate authorities where applicable. According to the information andexplanations given to us there are no undisputed amounts payable in respect of suchstatutory dues which have remained outstanding as at 31st March 2019 for a period of morethan six months from the date they became payable.
b) According to the records of the Company the dues outstanding of Income-Tax ValueAdded Tax Service Tax Duty of Customs Duty of Excise and Value Added Tax on account ofany dispute are as follows:
|Particulars ||Period to which the amount related ||Forum where the dispute is pending ||Amount (Rs. In Lacs) |
| ||2004-05 ||Income Tax Appellant Tribunal ||9.68 |
|Income Tax ||2011-12 ||Commissioner of Income Tax (Appeals) ||14.58 |
| ||1996-97 to 2001-02 ||Commissioner of Excise & Customs (Appeals) ||12.94 |
| ||2009-10 to 2013-14 2017-18 ||Commissioner of Excise & Customs (Appeals) Chandigarh ||38.18 |
|Excise Duty ||2007-2014 ||Tribunal (Appeal) Ahmedabad ||13.02 |
| ||2007-12 ||Commissioner (Appeal) Vapi ||37.58 |
| ||2011-2016 ||Joint Commissioner (Audit III) Vapi ||245.88 |
| ||2003-06 ||Commissioner of Service Tax (Appeal) ||121.70 |
| ||2010-2011 2009-10 to 2013-142014-15 ||Commissioner of Service Tax Mumbai ||52.54 |
|Service Tax ||2015-16 & 2016-17 ||Deputy Commissioner CGST Thane ||30.33 |
| ||2007-08 to 2012-13 ||Commissioner of CGST and Central Excise Navi Mumbai ||30.02 |
| ||1998-99 ||Deputy Commissioner (Appeal) Jaipur ||11.07 |
| ||2009-10 to 2013-14 ||Joint Commissioner of Sales Tax (Appeal) ||304.66 |
|Sales Tax ||2011-12 ||Joint Commissioner of Commercial Taxes West Bengal ||6.58 |
| ||2014-15 ||Deputy Commissioner of Commercial Taxes Dadra ||103.93 |
viii) The Company has not defaulted in repayment of its loans or borrowings to banks.The Company does not have any borrowings by way of debentures.
ix) The Company has not raised any moneys by way of Initial public offer or furtherPublic offer (Including debt instruments). Moneys raised by way of Term Loan were appliedfor the purpose for which those are raised.
x) On the basis of our examination and according to the information and explanationsgiven to us no fraud by the Company or any material fraud on the Company by its officersor employees has been noticed or reported during the year nor have we been informed ofany such case by the management.
xi) The managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii) The Company is not a Nidhi Company and accordingly provisions of clause (xii) ofPara 3 of the order are not applicable to the Company.
xiii) On the basis of our examination and according to the information and explanationsgiven to us we report that all the transaction with the related parties are in compliancewith Section 177 and 188 of the Act and the details have been disclosed in the Financialstatements in Note .33(P) as required by the applicable accounting standards.
xiv) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year and accordingly provisions ofclause (xiv) of Para 3 of the Order are not applicable to the Company.
xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly provisions ofclause (xv) of Para 3 of the Order are not applicable to the Company.
xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and accordingly provisions of clause (xvi) of Para 3 of the Orderare not applicable to the Company.
For SCA AND ASSOCIATES
(Firm Registration No.101174W)
Date: May 16 2019
"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF GRAUER & WEIL (INDIA) LIMITED
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of GRAUER& WEIL (INDIA) LIMITED ("the Company") as of March 312019 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by The Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by TheInstitute of Chartered Accountants of India.
For SCA AND ASSOCIATES
(Firm Registration No. 101174W)
Date: May 16 2019.