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Barak Valley Cements Ltd.

BSE: 532916 Sector: Industrials
NSE: BVCL ISIN Code: INE139I01011
BSE 00:00 | 03 Dec 20.15 0.30
(1.51%)
OPEN

19.35

HIGH

20.15

LOW

19.35

NSE 00:00 | 03 Dec 20.00 0.05
(0.25%)
OPEN

20.20

HIGH

20.20

LOW

19.40

OPEN 19.35
PREVIOUS CLOSE 19.85
VOLUME 12
52-Week high 31.50
52-Week low 15.00
P/E 7.10
Mkt Cap.(Rs cr) 45
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 19.35
CLOSE 19.85
VOLUME 12
52-Week high 31.50
52-Week low 15.00
P/E 7.10
Mkt Cap.(Rs cr) 45
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Barak Valley Cements Ltd. (BVCL) - Auditors Report

Company auditors report

To the Members of

Barak Valley Cements Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Barak ValleyCements Limited (‘the Company') which comprise the Balance Sheet as at March 312020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Cash Flow Statement for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand 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 prescribed under Section133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2020 and the financialperformance and other comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing specified underSection 143 (10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our Report. We are independent of the company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matter

We draw your attention to Note No. 47 to the Standalone Financial Statements whichexplain the uncertainties and the management's assessment of the financial impact due tolock -down and other restrictions and conditions related to the COVID-19 pandemicsituation for which a definitive assessment of the impact is highly dependent uponcircumstances as they evolve in the subsequent periods.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report:

S. no. Key Audit Matters Auditor's Responses
1. Evaluation of Capital Advances: (Advances against land (unsecured considered good) amounting to Rs. 13.12 Lacs and advances given to another company amounting Rs. 250.00 Lacs for acquisition of land in Meghalaya from last many years but the registration process of land has not yet been completed) As stated by the management the said land is in the possession of the company but yet the land is not registered in the company's name as the registration process is time taking in the state of Meghalaya.
2. Revenue Recognition: (Refer Note No. 26 to the Standalone financial statements and Note no. 2.15 of the Significant Accounting policies) Revenue is recognised when the control of the underlying products has been transferred to the customers along with the satisfaction of the company's performance obligation under a contract with the customer. Our audit procedure to assess the appropriateness of revenue recognition included :
a) Obtaining an understanding of and assessing the design implementation and operating effectiveness of the key control system regarding the revenue recognition process.
b) Assessing the appropriateness of the company's accounting policies relating to discounts rebates etc.

Due to the company's presence among various regions in north eastern states and thecompetitive business environment the estimation of various type of rebates discounts andincentive schemes to be recognised based on sales made during the year is material andconsidered to be complex and judgemental.

c) Obtaining and inspecting on a sample basis supporting documentation for discountsrebates and other incentive schemes to determine whether these were properly recorded.

Our testing as described above showed that revenue has been properly recorded inaccordance with the terms of contract and according to the policy adopted by the company.

Information other than the standalone financial statements and Auditors' Report thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report CorporateGovernance and Shareholder's information Business Responsibility Report but does notinclude the standalone financial statements and our auditor'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.

Management's Responsibility for 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 includingother comprehensive income cash flows and changes in equity of the company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under 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 ofthe appropriate implementation and maintenance of accounting policies; making judgementsand estimates that are reasonable and prudent; and design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial 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 also responsible for overseeing the Company's financialreporting process.

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 judgment andmaintain professional skepticism 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 up to 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 materially and quantitative factors in (1) planning the scope of our auditwork and in evaluating the results of our audit work: and (2) to evaluate the effect ofany identified 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.

Other Matters

Due to COVID 19 pandemic and the consequential nationwide lockdown announced by theCentral and State Government including travel restrictions maintenance of socialdistancing etc. the audit team has performed the audit from remote location on the basisof data scanned copies documents management estimates assumptions certificates andother information supplied electronically by the management on online platform. We haverelied on Management's assurance of the authenticity completeness and accuracy of theserecords electronically submitted to us. Further our attendance at the physical inventoryverification done by the Management was impracticable under the current lock-downrestrictions imposed by the Government and we have therefore relied on the relatedalternative audit procedures to audit the existence of inventory as per the guidanceprovided in SA 501 "Audit Evidence - Specific Consideration for Selected Items"and have obtained sufficient appropriate audit evidence to issue our unmodified opinion onthis Statement.

Our opinion is not modified in respect of this matter.

Report on other Legal & 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 inparagraphs 3 and 4 of the Order to the extent applicable.

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 purposes of our audit;

b) In our opinion proper books of accounts 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 Statement of changes in Equity and the Cash Flows Statement dealt with by thisReport are in agreement with the books of accounts.

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting standards specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

e) On the basis of written representations received from the directors as on March 312020 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of section 164 (2) ofthe Act;

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'.

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 :

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its director's 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 and to the bestof our information and according to the explanation given to us.

(i) The company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.

For P.K. Lakhani & Co. Chartered Accountants
Firm Registration No.: 014682-N
(CA. Sandeep Gulati) Partner M. No. 509230
UDIN : 20509230AAAACV3855
Place: Gurgaon Date: 14th July 2020

Annexure "A" to Independent Auditors' Report

The Annexure referred to in Paragraph (1) under the heading of "Report on OtherLegal and Regulatory Requirements" of our report for the year ended 31stMarch' 2020:

1. In respect of the Company's Fixed Assets:

(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets of the Company are physically verified by the Management atreasonable intervals and no material discrepancies have been noticed on such 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 areheld in the name of the company.

2. The inventories except goods in transit and material lying with third partieswhich have been substantially confirmed by them has been physically verified during theyear by the management ofthe company. In our opinion the frequency ofverification isreasonable and no material discrepancies were observed.

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 Companies Act 2013. So the provisions of paragraph 3(iii) of the saidOrder are not applicable to the company.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loan and investments made except loans/ advances to the wholly owned subsidiarieson which no interest has been charged as they have already incurred heavy losses.

5. The company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Companies Act and the Companies (Acceptance of Deposits) Rules2014 (as amended). Accordingly the provisions of the clause 3 (v) of the Order are notapplicable to the company.

6. Pursuant to the rules made by the Central Government the Company is required tomaintain Cost Records as specified under Sec. 148(1) of the Act. We have broadly reviewedthe same and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. However we have not made a detailed examination of thesaid records with a view to determine whether they are accurate or complete.

7. In respect of Statutory Dues:

(a) The company is generally regular in depositing the undisputed statutory duesincluding provident fund income-tax Goods and Service tax Custom duty cess and othermaterial statutory dues as applicable with the appropriate authorities. According to theinformation and explanations given to us there were no undisputed amount payable inrespect of aforesaid dues which were outstanding as at 31st March 2020 for aperiod of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us the particulars ofdisputed taxes and duties as at March 312020 which have not been deposited with theappropriate authorities are as under:

Name of the Statute Nature of Dues Amount (Rs. In Lacs) Period to which the amount relates Forum where dispute is pending
Assam Entry Tax Act 2008 Entry - Tax demand 90.79 2005 -06 to 2008 -09 Assessment year 2017- Appellate Authority Guwahati.
Income - Tax Act 1961 Income Tax demand 187.58 18 CIT(Appeals) Kolkata.

8. Based on our audit procedures and as per the information and explanation given to usby the management the company has not defaulted in repayment of loans or borrowings fromfinancial institutions or banks. The company has not issued any debentures.

9. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. According to the informationand explanations given by the management monies raised by way of term loans were appliedfor the purpose for which they were raised.

10. According to the information and explanations given to us and based upon the auditprocedures performed during the year we report that no material fraud by the company oron the company by its officers or employees has been noticed or reported during the year .

11. In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid/ provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with schedule V to the Companies Act 2013.

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 to the company.

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 sections 177 and 188 of the Companies Act 2013 where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable Indian accounting standards.

14. According to the information and explanations give 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 / partly convertible debentures duringthe year and hence reporting under Clause 3 (xiv) of the Order is not applicable to thecompany.

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 non-cashtransactions with its directors or persons connected with them as referred to in section192 of the Companies Act 2013. Accordingly paragraph 3 (xv) of the Order is notapplicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable tothe company.

For P.K. Lakhani & Co. Chartered Accountants
Firm Registration No.: 014682-N
(CA. Sandeep Gulati) Partner M. No. 509230
UDIN : 20509230AAAACV3855
Place: Gurgaon Date: 14th July 2020

Annexure - B to the Independent Auditors' 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 BarakValley Cements Limited ("the Company") as of 31 March 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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 the ICAI and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 our 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the company has in all material respects read with impact of COVID-19 stated in Emphasis of Matter paragraph in independednt Auditor's Report an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the ICAI.

For P.K. Lakhani & Co. Chartered Accountants
Firm Registration No.: 014682-N
(CA. Sandeep Gulati) Partner M. No. 509230
UDIN : 20509230AAAACV3855
Place: Gurgaon Date: 14th July 2020

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