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Moser Baer (India) Ltd.

BSE: 517140 Sector: Consumer
NSE: MOSERBAER ISIN Code: INE739A01015
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VOLUME 59049
52-Week high 7.96
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P/E
Mkt Cap.(Rs cr) 97
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 4.21
CLOSE 4.39
VOLUME 59049
52-Week high 7.96
52-Week low 3.97
P/E
Mkt Cap.(Rs cr) 97
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Moser Baer (India) Ltd. (MOSERBAER) - Auditors Report

Company auditors report

To the Members of Moser Baer India Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Moser Baer IndiaLimited(‘the Company') which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (‘the Act') with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed under Section 133 of the Act read with Rule 7 of the Companies(Accounts)Rules 2014 (as amended). 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 andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthese standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial controls relevant to theCompany's preparation of the standalone financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on these standalone financial statements.

Basis for Qualified Opinion

8. As explained in note 45 to the standalone financial statements the Company's shortterm borrowings and other current liabilities as at March 31 2017 include balance payableto various lender banks amounting to Rs.7586441082 and Rs.15700359440 respectively.These lender banks have taken an exit from Corporate Debt Restructuring Cell on October10 2016. As a result the accounting for these balances should be as per the originalagreements entered with such lender banks. However in absence of definitive agreementwith the banks with respect to calculation of interest and loan liability andreconciliation of outstanding debt with the lender banks we are unable to comment uponthe possible impact of such exit in carrying value of aforesaid short term borrowingsother current liabilities as on March 31 2017 and interest expense (including penalinterest if any) for the year ended March 31 2017 and the consequential impact on theaccompanying standalone financial statements.

9. As explained in note 13(b) to the standalone financial statements the Company hasfixed assets aggregating to Rs.4170872372 in respect of which management recorded animpairment loss of Rs.610000000 in year ended March 31 2017. In the absence ofsufficient and appropriate audit evidence with respect to the uncertainty underlying theassumptions used in the long term projections referred to in note 13(b) we are unable tocomment on the carrying value of aforesaid fixed assets as at March 31 2017 and theconsequential impact if any on the accompanying standalone financial statements.

10. As explained in note 47(a) to the standalone financial statements the Company hasan investment of Rs.166865334 trade receivables amounting Rs.344190858 and short termloans and advances (net of payables of Rs.14409834) amounting to Rs.4270919 in awholly owned subsidiary as at March 31 2017 being considered good and recoverable by themanagement. These balances are after netting off provision for diminution in value ofinvestment and provision for doubtful trade receivables of Rs.247643000 andRs.574834277 respectively already recorded by the Company during the year ended March31 2017. However in the absence of sufficient appropriate audit evidence in respect ofuncertainty underlying the assumptions used in the long term projections as referred to inthe said note we are unable to comment on the carrying value of these investments tradereceivables and short term loans and advances as at March 31 2017 and provision fordiminution in value of investment and doubtful trade receivable for the year ended March31 2017 and the consequential impact on the accompanying standalone financial statements.

Qualified Opinion

11. In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraphthe aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2017 its loss and its cash flows for the yearended on that date.

Emphasis of Matter

12. We draw attention to note 48 of the standalone financial statement which indicatesthat the Company has incurred a net loss of Rs.11139560016 during the year ended March31 2017 and as of that date the Company's accumulated losses amounted toRs.34744579031 resulting in complete erosion of its net worth. Further as of thatdate the Company's current liabilities exceeded its current assets by Rs.33984160899.These conditions along with other matters as set forth in note 48 indicate the existenceof material uncertainty that may cast significant doubt about the Company's ability tocontinue as a going concern. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

13. As required by the Companies (Auditor's Report) Order 2016(‘the Order')issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure I a statement on the matters specified in paragraphs 3 and 4 of theOrder. 14. Further to our comments in Annexure I as required by Section 143(3) of theAct we report that: a. we have sought and except for the possible effects of the mattersdescribed in the Basis for Qualified Opinion paragraph obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposeof our audit; b. except for the possible effects of the matters described in the Basis forQualified Opinion paragraphin our opinion proper books of account as required by lawhave been kept by the Company so far as it appears from our examination of those books; c.the standalone financial statements dealt with by this report are in agreement with thebooks of account; d. except for the possible effects of the matters described in the Basisfor Qualified Opinion paragraphin our opinion the aforesaid standalone financialstatements comply with the Accounting Standards prescribed under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014 (as amended); e. the mattersdescribed in paragraph 8910 and 12 under the Basis for Qualified Opinion/ Emphasis ofMatters paragraph in our opinion may have an adverse effect on the functioning of theCompany; f. on the basis of the written representations received from the directors andtaken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2017 from being appointed as a director in terms of Section 164(2) of the Act;g. we have also audited the internal financial controls over financial reporting (IFCoFR)of the Company as on March 31 2017 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date and our report datedMay 23 2017 as per Annexure II expressing a qualified opinion; and h. with respect to theother matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 (as amended) in our opinion and to the best ofour information and according to the explanations given to us: i. the Company as detailedin note 32 to the standalone financial statements has disclosed the impact of pendinglitigations on its financial position; ii. the Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses; iii. there has been no delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Company; iv. the Company as detailedin note 19 to the standalone financial statements has made requisite disclosures in thesestandalone financial statements as to holdings as well as dealings in Specified Bank Notesduring the period from November 8 2016 to December 30 2016. Based on the auditprocedures performed and taking into consideration the information and explanations givento us in our opinion these are in accordance with the books of account maintained by theCompany.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
per Neeraj Goel
Partner
Membership No.:099514
Place: New Delhi
Date: May 23 2017

Annexure I to the Independent Auditor's Report of even date to the members of MoserBaer India Limited on the standalone financial statements for the year ended March 312017

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: (i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of three financialyears which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. In accordance with this program certain fixed assets wereverified during the year and no material discrepancies were noticed on such verification.

(c) According to information and explanations given by the management the title deedsof immovable properties included in fixed assets are held in the name of Company. It hasbeen explained to us that the originals of title deeds and possession letters of theleasehold land and building has been given as security (mortgage and charge) against theterm loans and working capital facilities taken from banks and that original title deedsare kept with the security Trustee i.e Centbank Financial Services Limited as security forthe benefit of the lenders and therefore the same could not be made available to us forour verification. (ii) In our opinion the management has conducted physical verificationof inventory at reasonable intervals during the year and no material discrepancies betweenphysical inventory and book records were noticed on physical verification.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii) (c) of the Order are not applicable.

(iv) In our opinionthe Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans investments guarantees and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable. (vi)The Central Government has not specified maintenance of cost records under sub-section (1)of Section 148 of the Act in respect of Company's products. Accordingly the provisionsof clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues as applicable have generally beenregularly deposited to the appropriate authorities though there has been a slight delayin a few cases. Further no undisputed amounts payable in respect thereof were outstandingat the year-end for a period of more than six months from the date they became payable.

(b) The dues outstanding in respect of income-tax sales-tax service tax duty ofcustoms duty of exciseand value added tax on account of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs.) Amount paid under protest (Rs.) Period to which the amount relates Forum where dispute is pending
Custom Duty Custom duty 13924896 - FY 2007-08 CESTAT Chennai
Act 1962 Custom duty 9749862 - FY 2008-09 High Court of Allahabad
Custom duty 4823292 4823292 FY 2009-10 to 2011-12 CESTAT New Delhi
Excise Duty Excise duty 34008269 94307 FY 2008-09 CESTAT New Delhi
Act 1948 FY 2009-10
FY 2011-12
FY 2012-13
FY 2013-14
Excise duty 1111795 7220 FY 2011-12 to 2013-14 Assistant Commissioner Custom and Central Excise Noida
Excise duty 150621689 24470 FY 2007-08 Commissioner Custom and Central
FY 2010-11 Excise Noida
FY 2011-12
FY 2012-13
FY 2013-14
FY 2014-15
Excise duty 7773736 356530 FY 2010-11 Additional Commissioner Custom and Central Excise Noida
FY 2011-12
FY 2012-13
Excise duty 744493187 - FY 2005-06 Supreme Court
FY 2006-07
FY 2007-08
Finance Act 1994 Service tax 10749267 2953470 FY 2008-09 Commissioner Custom and Central Excise Noida
Service tax 851450 - FY 2012-13 to FY 2013-16 Commissioner Customs and Central Excise Ghaziabad
Service tax 10316085 - FY 2008-09 to 2010-11 Additional Commissioner Custom and Central Excise Noida
Service tax 7039640 - 2011-12 Commissioner Service Tax Delhi.
2012-13
Service tax 16855 - FY 2008-09 Supreme Court of India
FY 2009-10 to 2010-11
Entry Tax Act 2009 Entry tax 120161327 7050841 FY 1999-00 to 2001-02 High Court Allahabad
Entry tax 2930424 1465308 FY 2003-04 to 2007-08 Commercial Tax Tribunal Noida
Entry tax 4241834 1838272 FY 2004-05 Joint Commissioner Noida
FY 2005-06
FY 2008-09
Entry Tax 1207223 - FY 2012-13 Deputy Commissioner Raipur
(Appeals)
Entry Tax 276135 27650 FY 2007-08 Deputy Commissioner Raipur
(Appeals)
Central Sales Tax Act 1956 Sales tax 19329340 7408830 FY 2006-07 Commercial Tax Tribunal Noida
FY 2008-09
Sales tax 5168782 4572177 FY 2007-08 Additional Commissioner (Appeals)
FY 2011-12
FY 2012-13
Sales tax 21279392 - FY 2013-14 Joint Commissioner Noida
Sales tax 247572 - FY 2015-16 Assistant Commissioner Chennai
U.P. Trade Tax Act 1948 Value added tax 5364113 3094774 FY 2006-07 to 2007-08 Commercial Tax Tribunal Noida
Rajasthan Value Added Tax Act 2003 Value added tax 1229714 77200 FY 2011-12 Appellate Authority
FY 2012-13
U.P. Value Added Tax Act Value added tax 8774504 6327068 FY 2000-08 to 2008-09 FY 2012-13 Additional Commissioner (Appeals)
2008 Value added tax 6411838 800000 FY 2008-09 Commercial Tax Tribunal Noida
Value added 2562413 - FY 2013-14 Joint Commissioner Noida
tax
Kerala VAT Act 2005 Value added tax 2608271 1372789 FY 2007-08 Commercial Tax Assistant
FY 2008-09 Commissioner Ernakulam
Chhattisgarh VAT Act 2005 Value added tax 32697 3300 FY 2007-08 Deputy Commissioner Raipur
(Appeals)
West Bengal VAT Act 2003 Value added tax 1038907 - FY 2009-10 Joint Commissioner West Bengal
Income Tax Income tax 215297686 121478650 AY 2004-05 to Income Tax Appellate Tribunal
Act 1961 AY 2010-11

Notes:

(i) FY - Financial year (ii) AY - Assessment year

(iii) CESTAT - The Customs Excise and Service Tax Appellate Tribunal

(viii) The Company has defaulted in repayment of dues (including interest) to the banksand financial institutions during the current year as well as in earlier years. Asdetailed in note 45 of the standalone financial statements the lender banks have taken anexit from Corporate Debt Restructuring Cell on October 10 2016 and in absence ofdefinitive agreement with the banks with respect to calculation of interest and loanliability and reconciliation of outstanding debt with the lender banks the information inrespect of amount and period of delays for default in repayment of loan and interestcannot be ascertained.

Further the Company has no loans or borrowings payable government anddebenture-holders during the year.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.

(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been provided by the Company in accordance with therequisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable. (xiii) In our opinion all transactions withthe related parties are in compliance with Sections 177 and 188 of Act where applicableand the requisite details have been disclosed in the standalone financial statements etc.as required by the applicable accounting standards. (xiv) During the year the Company hasnot made any preferential allotment or private placement of shares or fully or partlyconvertible debentures.

(xv) In our opinionthe Company has not entered into any non-cash transactions with thedirectors or persons connected with them covered under Section 192 of the Act.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
per Neeraj Goel
Partner
Membership No.:099514
Place: New Delhi
Date: May 23 2017

Annexure II to the Independent Auditor's Report of even date to the members of MoserBaer India Limited on the standalone financial statements for the year ended March 312017

Independent Auditor's report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

1. In conjunction with our audit of the standalone financial statements of Moser BaerIndia Limited ("the Company") as of and for the year ended March 31 2017 wehave audited the internal financial controls over financial reporting (IFCoFR) of theCompany of as of that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance note on Audit of Internal Financial Controls over FinancialReporting (the ‘Guidance Note') issued by the Institute of Chartered Accountants ofIndia (the ‘ICAI'). These responsibilities include the designimplementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the Company's business including adherenceto Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (ICAI) and deemed to be prescribed undersection 143(10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate IFCoFR were established and maintained and ifsuch controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's IFCoFR

Meaning of Internal Financial Controls over Financial Reporting

6. A Company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of standalone financialstatements for external purposes in accordance with generally accepted accountingprinciples. A Company's IFCoFR includes those policies and procedures that (1) pertain tothe maintenance of records that in reasonable detailaccurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2)provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisa-tions of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the standalonefinancial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Qualified Opinion

8. According to the information and explanations given to us and based on our auditthe following material weaknesses has been identified in the operating effectiveness ofthe Company's IFCoFR as at March 31 2017: (a) The Company has been unable to determinethe impact of exit from CDR scheme on interest expense and carrying value of short termborrowings and other current liabilities in the absence of definitive agreement with thebanks with respect to calculation of interest and loan liability and reconciliation ofoutstanding debt with lender banks. In the absence of sufficient and appropriate auditevidence we are unable to comment on the operating effectiveness of controls over thecarrying value of short term borrowings other current liabilities as at March 31 2017and interest expense.

(b) We have not been provided sufficient and appropriate audit evidence with respect touncertainty underlying the assumptions used in the long term projections for assessing therecoverable value of fixed assets. In the absence of such sufficient and appropriate auditevidence we are unable to comment on the operating effectiveness of controls overcompleteness and accuracy of assumptions used in the long term projections and itspotential impact on value of fixed assets as March 31 2017 and depreciation amortisationand impairment expense for the year.

(c) We have not been provided sufficient and appropriate audit evidence with respect touncertainty underlying the assumptions used in the long term projections for assessing thecarrying value of investment trade receivables and short term loan and advances in awholly owned subsidiary. In the absence of such sufficient and appropriate audit evidencewe are unable to comment on the operating effectiveness of controls over completeness andaccuracy of assumptions used in the long term projections and its potential impact oncarrying value of investment and provision for other than temporary diminution in thevalue of investment.

9. A ‘material weakness' is a deficiency or a combination of deficiencies inIFCoFR such that there is a reasonable possibility that a material misstatement of thecompany's annual or interim financial statements will not be prevented or detected on atimely basis.

10. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India and exceptfor the possible effects of the material wea knesses described above in paragraph 8 on theachievement of the objectives of the control criteria the Company's internal financialcontrols over financial reporting were operating effectively as at March 31 2017. 11. Wehave considered the material weaknesses identified and reported above in determining thenature timing and extent of audit tests applied in our audit of the financial statementsof the Company as at and for the year ended March 31 2017 and these material weaknesseshave affected our opinion on the financial statements of the Company and we have issued amodified opinion on the financial statements.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
per Neeraj Goel
Partner
Membership No.:099514
Place: New Delhi
Date: May 23 2017

Statement on Impact of Audit Qualifications (for audit report with modified opinion)submitted along-with Annual Audited Financial Results - (Standalone Financials)

I. Statement on Impact of Audit Qualifications for the Financial Year ended 31 March2017 [See Regulation 33 / 52 of the SEBI (LODR) (Amendment) Regulations 2016] (Rs. inLakhs)

Sl. Particulars No. Audited Figures (as reported before adjusting for qualifications) Adjusted Figures (audited figures after adjusting for qualifications)
1 Turnover / Total Income 56098 56098
2 Total Expenditure 87152 87152
3 Net Profit / (Loss) (111396) (111396)
4 Earnings Per Share (50.23) (50.23)
5 Total Assets 126587 126587
6 Total Liabilities 417142 417142
7 Net Worth (290555) (290555)
8 Any other financial item(s) (As felt appropriate by the management) - -

II. Audit qualification (each audit qualification separately) a. Details of AuditQualification

The audit report of Statutory Auditors contains the following qualifications on thestandalone audited financial statement (the "statement"): (a) As explained innote 2 of the statement the Company's short term borrowings and other current liabilitiesas at 31 March 2017 include balances payable to various lender banks amounting to Rs.75864 lakhs and Rs. 157004 respectively. These lender banks have taken an exit fromCorporate Debt Restructuring Cell on 10 October 2016. As a result the accounting for thesebalances should be as per the original agreements entered with such lenders banks.However in absence of definitive agreement with the banks with respect to calculation ofinterest and loan liability and reconciliation of outstanding debt with the lender bankswe are unable to comment upon the possible impact of such exit on the carrying value ofaforesaid short term borrowings other current liabilities as at 31 March 2017 andinterest expense (including penal interest if any) for the year ended 31 March 2017 andthe consequential impact on the accompanying statement. (b) As explained in note 3 of thestatement the Company has fixed assets aggregating to Rs. 41709 lakhs in respect ofwhich management recorded an impairment loss of Rs. 6100 lakhs in quarter ended 30September 2016. In the absence of sufficient and appropriate audit evidence with respectto the uncertainty underlying the assumptions used in the long term projections referredto in note 3 we are unable to comment on the carrying value of aforesaid fixed assets asat 31 March 2017 and the consequential impact if any on the accompanying statement.

(c) As explained in note 4 of the statement the Company has an investment of Rs. 1668lakhs trade receivables amounting to Rs. 3442 lakhs and short term loans and advances(net of payables of Rs.144 lakhs) amounting to Rs. 43 lakhs in a wholly owned subsidiaryas at 31 March 2017 being considered good and recoverable by the management. Thesebalances are after netting off provision for diminution in value of investment andprovision for doubtful trade receivables of Rs. 2476 lakhs and Rs. 5748 lakhsrespectively already recorded by the Company during the year ended 31 March 2017 (duringthe quarter ended 31 March 2017: Rs. 1927 lakhs and Rs. 1900 lakhs respectively).However in the absence of sufficient appropriate audit evidence in respect of uncertaintyunderlying the assumptions used in the long term projections as referred to in the saidnote we are unable to comment on the carrying value of these investments tradereceivables and short term loans and advances as at 31 March 2017 and provision fordiminution in value of investment and doubtful trade receivables for the year ended 31March 2017 and the consequential impact on the accompanying statement. b. Type of AuditQualification: Qualified Opinion c. Frequency of Qualification:

(a) has appeared in the current year ended 31 March 2017. (b) has appeared in thecurrent year ended 31 March 2017. (c) has been appearing since period ended 31 December2013.

In audit report on the financial statements for the nine months period ended 31December 2013 year ended 31 December 2014 and fifteen months ended 31 March 2016 theauditors had given emphasis of matter on recoverability of investments and advances fromMoser Baer Entertainment Limited.

d. For Audit Qualification(s) where the impact is quantified by the AuditorManagement's Views:

Management's Views:Not applicable e. For Audit Qualification(s) where the impact is notquantified by the auditor:

(i) Management's estimation on the impact of audit qualification: - Unable to estimate.

(ii) If management is unable to estimate the impact reasons for the same: a) Inabsence of definitive agreement with the banks with respect to calculation of interest andloan liability management is unable to comment upon the impact of such exit on thecarrying value of aforesaid short term borrowings other current liabilities and interestexpense for the financial year ended 31 March 2017 and the consequential impact on theaccompanying consolidated financial results. b) As of 31 March 2017 management performeddetailed assessment of impairment (using an independent valuation expert) of carryingvalue of fixed assets based on business valuation. Such assessment is based on the abilityof the company to continue to operate its business over the foreseeable future and istherefore impacted by the future outcome of certain matters such as negotiation withlenders banks for debt restructuring and revival of business operations. As per suchassessment Impairment of fixed assets for Rs. 6100 lakhs has been made during the year.No further impairment in the carrying value of fixed assets is required. c) As on 31 March2017 management performed an assessment of impairment for its investments (using anindependent valuation expert) in and advances/other receivables from one of the subsidiarycompany Moser Baer Entertainment Limited as of 31 March 2017 to determine if there is any"other than temporary" diminution in the values of the investment and ifoutstanding receivables are recoverable. The future cash flows used in such assessment aredependent on the assumption of acceptance of debt resolution plan by lender banks of theCompany and ability of this subsidiary company to continue to operate its business overthe foreseeable future with the Company. Basis aforementioned assessment management hasrecorded an other than temporary provision for diminution in value of investment amountingto Rs. 2476 lakhs and Rs. 5748 lakhs towards provision for doubtful debts during theyear ended 31 March 2017.

(iii) Auditors' Comments on (i) or (ii) above:

Since management could not ascertain the consequential impact the auditors have givenqualification in their standalone auditors' report.

III. Signatories
CEO / Managing Director
CFO
Audit Committee Chairman
Statutory Auditor
Place: New Delhi
Date: May 23 2017