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Barak Valley Cements Ltd.

BSE: 532916 Sector: Industrials
NSE: BVCL ISIN Code: INE139I01011
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VOLUME 863
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Mkt Cap.(Rs cr) 46
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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 312021 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 informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at 31st March 2021 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 attention to Note No. 49 to the Standalone Financial Statements whichdescribes the economic and social consequences/ disruption the entity is facing as aresult of COVID-19 and its impact on financial position/ ability of the company to facethe challenge/ impact on supply chain and demand/ impact on the standalone financialstatements requiring adjustments. 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. In respect of parties' balances confirmations were sought at year end. Some parties have sent the confirmations. In respect of other parties management realises that due to COVID -19 lockdown many offices were being closed and others working with skeleton staff confirmations are not coming. It is also explained that company has the system of reconciling balances with the parties from time to time and most of the parties are having regular business transactions with the company. In the absence of external confirmations we carried out alternative procedures to verify the balances of parties :
(a) We tested the effectiveness of controls over sales and purchase transactions with the parties and accounting of the same in books of accounts.
(b) Transactions of Sales / purchase were verified through external bills and invoices. The payments were cross verified from the bank statements of the company. In view of the high magnitude of such transactions we followed SA -530 "Audit Sampling" in this regard.
2. Revenue Recognition:
(Refer Note No. 26 to the Standalone financial statements and Note no. 2.15 of the Significant Accounting policies) Our audit procedure to assess the appropriateness of revenue recognition included :
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. a) Obtaining an understanding of and assessing the design implementation and operating effectiveness of the key control system regarding the revenue recognition process and its compliance with the Ind AS -115 ‘Revenue from contract with the customers'.
Due to the company's presence among various regions in north eastern states and the competitive business environment the estimation of various type of rebates discounts and incentive schemes to be recognised based on sales made during the year is material and considered to be complex and judgemental. The risk is therefore that revenue is not recognised in accordance with Ind AS -115 ‘Revenue from contracts with customers'. b) Assessing the appropriateness of the company's accounting policies relating to discounts rebates etc.
c) Performed sample tests of individual sale transactions and going through sales invoice sales order and other related documents for discounts rebates and other incentive schemes.
d) Assessed the adequacy of relevant disclosures made within the financial statements.
Our testing as described above showed that revenue has been properly recorded in accordance 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 identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears 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 the Standalone Financial Statements:

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance 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 standalonefinancial statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.

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 thosecharged with governance regarding among other matters the planned scope and timing ofthe audit and significant audit findings including any significant de_ciencies ininternal 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 withthose charged with governance we determine those matters that were of most significancein the audit of the standalone financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Other Matters

Due to COVID 19 pandemic and the consequential lockdown/ restriction on movementsannounced by the 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. 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 SelectedItems" and have obtained sufficient appropriate audit evidence to issue ourunmodified opinion on this 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 subsection (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 andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b) In our opinion proper books ofaccounts as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) The Balance Sheet the Statement of Profit and Lossincluding other comprehensive income Statement of changes in Equity and the Cash FlowsStatement dealt with by this Report are in agreement with the books of accounts. d) In ouropinion the aforesaid standalone financial statements comply with the Indian Accountingstandards specified under section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended; e) On the basis of written representations receivedfrom the directors as on March 31 2021 and taken on record by the Board of Directorsnone of the directors is disqualified as on March 31 2021 from being appointed as adirector in terms of section 164 (2) of the Act; f) With respect to the adequacy of theinternal financial controls over financial reporting of the company and the operatingeffectiveness of such controls refer to our separate report in ‘Annexure B'. g) Withrespect to the other matters to be included in the Auditor's Report in accordance with therequirements of section 197(16) of the Act : In our opinion and according to theinformation and explanations given to us the company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by provisions of section197 of the Act. h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 and tothe best of our information and according to the explanation given to us. (i) The companyhas disclosed the impact of pending litigations on its financial position in itsstandalone 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 : 21509230AAAAHS3830
Place: Gurgaon
Date: 29th June 2021

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 31st March' 2021:

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 Companyare physically verified by the Management at reasonable intervals and no materialdiscrepancies 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 of the company. In our opinion having regard to nature andlocation of inventory the frequency of verification is reasonable and no materialdiscrepancies were noticed on such verifications.

3. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. So the provisions of paragraph 3(iii) of the said Orderare 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 respect tothe loan and investments made except loans/ advances to the wholly owned subsidiaries onwhich 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 2021 for a period ofmore than six months from the date of becoming payable. (b) According to the informationand explanations given to us the particulars of disputed taxes and duties as at March312021 which have not been deposited with the appropriate 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 Appellate Authority Guwahati.
Income - Tax Act 1961 Income Tax demand 187.58 Assessment year 2017-18 CIT(Appeals) Kolkata.
Central Excise Act 1944. Education Cess and Secondary and Higher Education Cess 166.23 FY 2004-05 to FY 2014-15 Guwahati High Court
Central Excise Act 1944. Refund of Excise duty 258.84 FY 2008-09 to FY 2014-15 Guwahati High Court

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 government or bank or debenture holders.

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.

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 adequately disclosed in the financial statementsas required by the applicable Indian accounting standards. 14. The Company has not madeany preferential allotment or private placement of shares or fully / partly convertibledebentures during the year and hence reporting under Clause 3 (xiv) of the Order is notapplicable to the company.

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 theReserve Bank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is notapplicable to the company.

For P.K. Lakhani & Co.
Chartered Accountants
Firm Registration No.: 014682-N
(CA. Sandeep Gulati)
Partner
M. No. : 509230
UDIN : 21509230AAAAHS3830
Place: Gurgaon
Date: 29th June 2021

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 2021 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on our judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that 1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; 2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and 3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to 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 independent 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 2021 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 : 21509230AAAAHS3830
Place: Gurgaon
Date: 29th June 2021

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