Adhunik Metaliks Ltd.
|BSE: 532727||Sector: Metals & Mining|
|NSE: ADHUNIK||ISIN Code: INE400H01019|
|BSE 00:00 | 29 Nov||Adhunik Metaliks Ltd|
|NSE 05:30 | 01 Jan||Adhunik Metaliks Ltd|
|BSE: 532727||Sector: Metals & Mining|
|NSE: ADHUNIK||ISIN Code: INE400H01019|
|BSE 00:00 | 29 Nov||Adhunik Metaliks Ltd|
|NSE 05:30 | 01 Jan||Adhunik Metaliks Ltd|
TO THE MEMBERS OF "ADHUNIK METALIKS LIMITED"
Report on the Standalone Ind AS Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of ADHUNIKMETALIKS LIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 and the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. In conducting our audit we have taken into account theprovisions of the Act the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.
5. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements..
6. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 and its loss total comprehensive loss its cash flows andthe changes in equity for the year ended on that date.
Emphasis of Matter
7. We draw attention to:
a) Note no 51 of the standalone Ind AS financial statement stating thereto the matterof the Company incurring losses continuously and consequently the net-worth being erodedcompletely the current liabilities exceeding the current assets due compliance of CDRpackage not being met with and the lenders having since invoked the Strategic DebtRestructuring'(SDR) pursuant to RBI Circulars dated 8th June 2015 and 24th Sep 2015 theimplementation thereof being under progress. Further the management expect improvement inraw material availability likely improvement in market scenario cost synergies frommerger conversion of debts into equity and debt restructuring as may be agreed withlenders it is expected that the overall financial health of the Company would improveconsiderably. Considering the above developments and favourable impact thereof on theCompany's operations and financials the Company has prepared the financial results on thebasis of going concern basis.
b) Note no 4.1 of the standalone Ind AS financial statement that the Company has madelong term investments in Adhunik Power and Natural Resources Limited amounting to Rs.1000.02 lacs. The said investments continue to be valued at cost. As per the latestmanagement certified financial statement for the year ended 31st March 2017 the bookvalue of said investment is significantly lower than cost. However the company has notmade any provision for diminution in value of its investments as it considers suchinvestment was as long term strategic investment and in view of the management suchdiminution are temporary in nature. Accordingly impact if any on the standalone Ind ASfinancials is currently not ascertainable.
c) Note no 4.2 of the standalone Ind AS financial statement that the Company has madelong term investments in Orissa Manganese & Minerals Limited amounting to Rs. 6309.60lacs. The said investments continue to be valued at cost. As per the latest auditedfinancial statement for the year ended 31st March 2017 the book value of said investmentis fully eroded. However the company has not made any provision for diminution in valueof its investments as it considers such investment was as long term strategic investmentand in view of the management such diminution are temporary in nature. Accordinglyimpact if any on the standalone Ind AS financials is currently not ascertainable.
d) Note no 43 regarding advances trade payable and trade receivable other than aboveare subject to confirmation from respective parties and consequentialreconciliation/adjustment arising there from if any. Hence financial impact if any cannotbe ascertained.
Our opinion is not modified in respect of these matters
Report on Other Legal and Regulatory Requirements
8. 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 give in "Annexure A" a statementon the matters specified in paragraphs 3
and 4 of the Order.
As required by Section 143(3) of the Act based on our audit we report to the extentapplicable 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account;
d. in our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act;
e. The matter described in Emphasis of Matters paragraph above in our opinion mayhave an adverse effect on the functioning of the Company.
f. on the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164(2) of the Act;
g. 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"; and
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 financial statements as stated in Note No. 31 to the standalone Ind ASfinancial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts to the Investor Education andProtection Fund by the Company.
iv. The Company has provided requisite disclosures in its standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016 and these are in accordance with the booksof accounts maintained by the Company. Refer Note no 10.1 to the standalone Ind ASfinancial statements.
We did not audit the financial statements of a foreign branch being included in thestandalone Ind AS financial statements of the Company whose financial statements reflecttotal assets (net) of Rs.68.02 lacs as at 31st March 2017 and total revenues of Rs. Nilfor the period ended on that date as considered in the standalone Ind AS financialstatements. The financial statements of this branch have been audited by the branchauditor whose reports have been furnished to us and our opinion in so far as it relatesto the amounts and disclosures included in respect of this branch is based solely on thereport of such branch auditor. Our opinion in respect of said matter is not modified.
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone Ind AS financial statements for the period ended 31st March2017 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets;
(b) As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification;
(c) As per information and explanation given to us by the management all the titledeeds of the immovable properties are held in the name of the Company;
(ii) As explained to us inventories were physically verified during the period by themanagement at reasonable intervals. As the Company's inventory of raw material andfinished goods mostly include bulk materials which require technical expertise forestablishing the quantity thereof the Company has hired independent agency namely QualityServices & Solutions Private Limited for physical verification of such stocks. Relyingon the above verification report by such independent expert agency and according toinformation and explanation furnished to us by the management the procedures of physicalverification of inventory followed by the management seems to be reasonable and adequatein relation to the size of the Company and the nature of its business. However we havenot made detailed analysis of such procedures of physical verification done by independentexpert. Based on the above we are of the opinion and according to the information andexplanation given to us the Company has maintained proper records of its inventories andno material discrepancies were noticed on physical verification. Further we haveidentified that there are inventories which have no movement or very little movement forover one year amounting to ' 37277.32 Lacs. The Company is in process of gettngtechnical/commercial/ market evaluation in respect of such inventories realisable valueof the same may be lower than carrying value in the financial statement;
(IIi) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms limited liability partnerships or other parties covered inthe register maintained under section 189 of the Companies Act 2013. Consequently theprovisions of paragraph iii(a) iii(b) and iii(c) of the Order are not applicable to theCompany and hence not commented upon;
(iv) In our opinion and according to information and explanations given to us theCompany has not made any loans investments or guarantees. However company has pledged apart of its investment in the earlier years for the loans taken by its wholly ownedsubsidiary from banks and financial institutions the terms and conditions thereof in ouropinion prima-facie prejudicial to the interest of the Company;
(v) The Company has not accepted any deposit from the public covered under Section 73to 76 of the Companies Act 2013. Therefore the provisions of paragraph 3(v) of the Orderis not applicable to the Company;
(vi) According to the information and explanations given to us in our opinion theCompany have prima facie made and maintained the prescribed cost records pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under subsection (1) of Section 148 of the Companies Act 2013. We havehowever not made a detailed examination of the cost records with a view to determiningwhether they are accurate or complete.
(vii) a) According to the information and explanation given to us and on the basis ofour examination of the records of the company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Income TaxSales Tax Service Tax Value Added Tax cess or other material statutory dues have beengenerally regularly deposited during the period by the Company with appropriateauthorities.
According to the information and explanation given to us no undisputed statutory duesincluding Provident Fund Income Tax Service Tax Value Added Tax cess or other materialstatutory dues were in arrears as at 31st March 2017 for a period of more thansix months from the date they become payable except in following cases:
b) According to the information and explanation given to us the following dues of vatsales-tax central sales tax excise service tax and ESI have not been deposited by thecompany on account of dispute as at 31st March 2017:
(viii) Based on the records examined by us and as per the information and explanationsgiven to us the Company has defaulted in the payment of principal as well as interestdues to the following banks and Financial Institutions:.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instrument) during the year. According to the information andexplanations given to us further disbursement of Term loan received during the year wereapplied for the purpose they were raised.
(x) Based on the audit procedures performed and the information and explanations givento us we report that no material fraud on or by the Company has been noticed or reportedduring the period nor have we been informed of such case by the management;
(xi) According to information and explanation given to us the Company has not paid orprovided any managerial remuneration and hence paragraph 3(xi) is not applicable;
(xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company and hence the paragraph 3(xii) is not applicable;
(xiii) 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 Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian accounting standards
(xiv) According to information and explanation given to us the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the period under review;
(xv) According to information and explanation given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with him. Accordinglythe paragraph 3(xv) is not applicable the Company;
(xvi) In our opinion and on the basis of information and explanation given to us by themanagement the Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.
Annexure - B to the Independent Auditor's Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of AdhunikMetaliks Limited ("the Company") as of 31st March 2017 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the period ended onthat 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 ('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 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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately 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 standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the Company are being made only in accordance withauthorisations 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 financialstatements.
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 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.