Coral Newsprints Ltd.
|BSE: 530755||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE715D01019|
|BSE 05:30 | 01 Jan||Coral Newsprints Ltd|
|NSE 05:30 | 01 Jan||Coral Newsprints Ltd|
|BSE: 530755||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE715D01019|
|BSE 05:30 | 01 Jan||Coral Newsprints Ltd|
|NSE 05:30 | 01 Jan||Coral Newsprints Ltd|
INDEPENDENT AUDITOR'S REPORT
To the Members of Coral Newsprints Limited
Report on the Financial Statements
We have audited the accompanying Standalone financial statements of Coral News PrintsLtd ('the company') which comprises the Balance Sheet as at March 31 2017 the Statementof Profit and Loss and the Cash flow statement for the year then ended and a summary ofsignificant 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 andpresentation of these Standalone financial statements that give a true and fair view ofthe financial position financial performance and Cash flow of the Company in accordancewith the Accounting principles generally accepted in India including the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the act for safeguarding theassets of the company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation &presentation of the Standalone financial statements that's give a true & fair view& are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accounting& auditing standards & the matters which are required to be included in the auditreport under the provisions of the Act & the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified u/s. 143sub section 10 of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Standalone financial statements. The procedures selected depend onauditor's judgment including the assessment of the risks of material misstatement of theStandalone financial statements whether due to fraud or error. In making those riskassessments the auditors consider internal financial controls relevant to the Company'spreparation of the Standalone financial statements that gave a true & fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by Company's Directors as well asevaluating the overall presentation of the Standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone financial statements.
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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the accounting standards ofthe financial position of the company as at 31st March 2017 and its loss and its cashflows for the year ended on that date.
Report on Other legal and Regulatory Requirements
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 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 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 bestof our knowledge and belief were necessary for the purpose 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 statement of Profit and Loss and the cash flow statements dealtwith by this report are in agreement with the books of accounts.
d) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified u/s. 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of written representations received from the Directors as on March312017 and taken on record by the Board of Directors none of the directors aredisqualified as on March 312017 from being appointed as a director in term of section164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness or such controls refer to ourseparate report in "Annexure B":and
g) 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 in ouropinion 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 FinancialPosition in its Standalone financial statements- Refer Note 28 to the Standalone FinancialStatements.
ii) In our opinion and as per the information and explanations provides to us thecompany has not entered into any long term contracts including derivative contractsrequiring provision under applicable laws or Accounting Standards for materialforeseeable losses and
iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection fund by the Company.
iv) The Company have holding or dealings in specified bank notes during the period from8th November 2016 to 30th December 2016 ("refer to notes to accounts no. 29 to thestandalone financial statements) For L.N. MALIK & CO
" ANNEXURE A" TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the companyon the Standalone financial statements for the year ended 31st March 2017 we report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has a regular program of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this program certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the company and thenature of its assets.
(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 areheld in the name of the company.
2) (a) In Our Opinion and accordance to the information and explanations given to usthe company is maintaining proper records of its inventories showing full particulars.
(b) As informed to us the Inventory has been physically verified at the year end bythe management and no material discrepancies were noticed on such verification in ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the company and the nature of its business.
3) The company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3(iii)(a) to (c) of theOrder are not applicable to the Company.
4) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the company the company has not made anyloans investment guarantee and security during the year which are covered under section185 & 186 of the Companies Act 2013 hence para 3 (iv) is not applicable.
5) The Company has not accepted any deposits from the public.
6) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the act in respect of the activities carried on by the company.
7) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the company amount deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax value added tax duty of custom service tax cess and other material statutorydues have been regularly deposited during the year by the company with the appropriateauthorities. The company has not deposited previous year dues of related to Provident fundand TDS with appropriate authorities having an arrear of Rs 373062/- w.r.t Providentfund and Rs 12374 /- w.r.t TDS as on 31.03.2017.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess and other material statutory dues were in arrear as at 31stMarch 2017 for a period of more than six month from the date they become payable.
(b) According to the information and explanations given to us the details of dues ofIncome tax sales tax and water cess which have not been deposited as on 31st March 2017on account of disputes are given below :
8) In our opinion and according to the information and explanations given to us thecompany has defaulted in repayment of loans or borrowing to a financial institution bankand government;-
a) Term loan from PICUP has been Settled For OTS (One Time Settlement) vide letterDated -13-10-2011 for an amount of Rs. 200 Lacs .Against this the company has paid Rs.30Lacs in FY-2011-12 & Rs.170.86 Lacs till 31.03.2013 including finance charges.
b) As per letter Dated 07.02.2013 received From PICUP the company has to pay RCCollection charges @10% of OTS amount within one month time as per the rules of PICUP.The Company has informed the PICUP that as per their information there are no recoverycertificates pending against any of the Guarantors & requested them to issue NOobjection certificate but PICUP has requested No Due certificates from various Tehsils/ DMin respect of dues against guarantors which are still awaited.
Due to the above facts finalization of recovery of RC collection charges is stillpending & hence no provision has been made in the books of accounts. However as perexplanation given to us the company is in process of obtaining No Dues Certificate fromPICUP.
c) The company had already paid OTS amount of UPFC loan in the previous years. Howeverin respect of the DADP interest demanded by UPFC(i.e. Rs. 51.83 lacs) vide its letterdated 24.03.2011 against which the company has requested for a waiver of 75% vide itsletter dated 04.08.2011 in respect of which BIFR board has directed waiver of 50% of DADPdemand as per its order dated 23.05.2012.
Hence as per the BIFR Board's order DADP demand would comes out to Rs. 25.92 Lacs.
Further on the basis of BIFR direction the company has requested for a waiver of 50%of DADP amount vide letter dated 09.02.2013 but UPFC rejected the request vide letterdated 04.03.2013 stating that waiver cannot be granted as per approved guidelines of thecorporation.
However UPFC vide its letter dated 10.2.2014 has asked the company to submit fresh OTSwith 10% amount of outstanding principal as earnest money within 15 days of issue of thisletter.
The company has filed its objection against this letter & requested to follow theBIFR Order for waiver of 50% of DADP interest.
BIFR vide its order dated 12.11.2014 has approved the draft Rehabilitation Scheme ofthe company & waived of 50% of the DADP amounting which stood at Rs. 25.92 lacsagainst which the company has paid Rs.21.82 lacs till 31.03.2016. Against this order ofBIFR the UPFC has approached AIFR & the matter is still under consideration.
Further the ministry of finance has appointed 1st December 2016 as the date on whichprovisions of sick industrial companies (special provisions) Repeal Act 2003 shall comeinto force. Therefore the SICA is repealed wef from 1st December 2016. The BIFR and AIFRstand dissolved with effect from 1st December 2016 and all the proceeding before themstand abated. Therefore the outstanding of the company with UPFC shall be revised as perinformation given to us & the company not received any letter from UPFC for recoveryof Dues till the date our Audit Report.
d) No confirmation of closing balance was available in respect of interest due to UPFC& due to above facts no provision of DADP interest on UPFC loan was made in the booksof accounts during the year.
Further the company has not issued any debentures.
9) The company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) and term loan during the year .
10) According to the information and explanations given to us no material fraud by theCompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.
11) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
12) In our opinion and according to the information and explanations given to us thecompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
13) According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of the companies Act where applicable and details ofsuch transactions has been disclosed in the financial statements as required by theapplicable accounting standards.
14) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
15) 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 him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
16) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure- B to the Auditors Report.
Report on the Internal Financial Controls under Clause (i) of sub section (3) ofSection 143 of the Companies Act 2013. (" the Act")
We have audited the internal financial controls over financial reporting of CoralNewsprints Limited (" the company") as on 31s March 2017 in conjunction withour audit of the 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 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 control over financial reportingissued by the Institute of Chartered Accountants of India ('ICAI').These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the company's internal financial controlover financial reporting based on our audit. We conducted our audit in accordance with theguidance note on audit of internal financial control over financial reporting (the "guidance note") and the standards on auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of internal financialcontrols and both issued by the Institute of Chartered Accountants of India. Thosestandards and the guidance notes require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control system over financial reporting and their operatingeffectiveness.
Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement 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 controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statement 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 asset of the company (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparations of financial statements inaccordance with generally accepted accounting principles and receipts and expenditure ofthe company are being made only In accordance with authorization of management and thedirector of the company and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition use or disposition of the company's assetsthat 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 may 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 overfinancial reporting may become inadequate because of changes in conditions or that thedegree 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 31st March 2017 based on theinternal controls over financial reporting criteria established by the company consideringthe essential components of internal controls stated in the guidance note on audit ofinternal financial controls over financial reporting issued by the Institute of CharteredAccountants of India.