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Barak Valley Cements Ltd.

BSE: 532916 Sector: Industrials
NSE: BVCL ISIN Code: INE139I01011
BSE 13:46 | 20 Jun 19.65 -0.35
(-1.75%)
OPEN

19.50

HIGH

19.65

LOW

19.45

NSE 13:39 | 20 Jun 20.75 0.65
(3.23%)
OPEN

19.50

HIGH

21.10

LOW

19.50

OPEN 19.50
PREVIOUS CLOSE 20.00
VOLUME 1250
52-Week high 36.20
52-Week low 19.45
P/E 15.35
Mkt Cap.(Rs cr) 44
Buy Price 19.60
Buy Qty 50.00
Sell Price 20.85
Sell Qty 5.00
OPEN 19.50
CLOSE 20.00
VOLUME 1250
52-Week high 36.20
52-Week low 19.45
P/E 15.35
Mkt Cap.(Rs cr) 44
Buy Price 19.60
Buy Qty 50.00
Sell Price 20.85
Sell Qty 5.00

Barak Valley Cements Ltd. (BVCL) - Auditors Report

Company auditors report

To the Members of

Barak Valley Cements Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of BARAK VALLEYCEMENTS LIMITED ('the Company') which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and the Cash Flow Statement for the year ended anda summary of significant accounting policies and other explanatory information.

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 Companies Act 2013 (''the Act'') with respect to the preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the Accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting frauds and other irregularities;selection and application of the appropriate accounting policies; making judgements 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 financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into accounts the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under.

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 whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by Company's management as well as evaluating the overall presentation ofthe standalone financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid standalone financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 40 to the financial results regarding the Company's long terminvestment in its wholly owned subsidiary 'Badarpur Energy Pvt. Ltd.' and loans &advances due from such subsidiary amounting to Rs. 31.77 crores and 22.16 croresrespectively as at March 31 2017. The net worth of the aforesaid subsidiary has beenfully eroded & having net worth of Rs. (1.85 crores) as at March 31 2017 and hadincurred a net loss amounting to Rs. 1.59 crores during the year ended March 31 2017.Further operations of the aforesaid subsidiary were discontinued since July 2014 due tonon availability of the raw material/ fuel.

These conditions indicate the existence of material uncertainty that may causesignificant doubt about the subsidiary's ability to continue as a going concern. Howeverthe management of the subsidiary is con dent that operation of the subsidiary will startin future and the decline in the value of the aforesaid investment is temporary in natureas per AS-13 (Accounting for investments) and aforesaid loans and advances are consideredas fully recoverable. Accordingly no provision for the same has been recognized in theaccompanying financial results.

However in view of huge accumulated losses of the subsidiary and non operation of itsplant since July 2014 we are unable to express an opinion in the extent of therealisability of the aforesaid investment in its subsidiary and loans and advances duefrom the subsidiary. The consequential effect of the above on the standalone financialresults for the year ended March 31 2017 is not ascertainable and as such cannot becommented upon by us.

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 in paragraphs 3and 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 account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 ;

e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 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 included in the Auditor's report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 and to best of ourinformation and according to the explanation given to us.

(i) The company has disclosed the impact of pending litigations on its financialposition in its financial statement- refer Note 27 28 to the 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; and.

(iv) The company has provided requisite disclosures in the financial statements as toholding as well as dealings in specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the company. Refer to Note 44 to the standalone financial statements.

For Kumar Vijay Gupta & Co.
Chartered Accountants
Firm Registration No. 007814-N
(CA. Mahesh Goel)
Partner
M. No. 088958
Place: New Delhi
Date: 30th May 2017

Annexure "A" to the 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 2017we report that:

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets of the company have been physically verified by the managementaccording to a phased programme on a rotational basis which in our opinion is reasonablehaving regard to the size of the company and nature of its fixed assets. No materialdiscrepancies were 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 the frequency of verification isreasonable and no material discrepancies were observed.

3. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013. So the provisions of paragraph 3(iii) are not applicable.

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 loans investments guarantees and security provided.

5. On the basis of our examination of books and records of the company in our opinionand according to the information and explanations given to us the company has notaccepted any deposit covered under sections 73 to 76 of the Companies Act and the rulesframed there under with regard to the deposits accepted from public during the year.

6. We have broadly reviewed the accounts and records maintained by the company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not made any detailedexamination of the said records with a view to determine that they are accurate.

7. (a) The company is generally regular in depositing undisputed statutory duesincluding provident fund income-tax sales tax wealth tax service tax duty of customsduty of excise value added tax cess and other statutory dues applicable to it with theappropriate authorities. There were no arrears of statutory dues as at 31st March' 2017except for a sum of Rs.1176620/- on account of Cess on cement Rs. 4843020/- onaccount of Service- tax Rs. 199765/- on account of TDS and Rs. 7797840/- on accountof VAT for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us the particulars ofdisputed taxes and duties as at March 31 2017 which have not been deposited with theappropriate authorities are as under:

Name of the Statute Nature of Dues Amount (Rs. In Lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961. Income- Tax demand 169.13 A Yr. 2007-08 to 2011-12 Ist Appellate Authority Kolkata.
Assam Entry Tax Act 2008 Entry Tax demand 90.79 2005 -06 to 2008 - 09 Appellate Authority Guwahati.

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 dues to financialinstitutions or banks. The company has not issued any debentures.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) during the year. According to the information andexplanations given by the management monies raised by way of term loans were applied forthe 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 fraud on or by the Company hasbeen noticed or reported during the year.

11. In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid in accordance with the requisite approvals mandatedby 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 Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting 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 or partly convertible debentures duringthe year.

15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him . Accordingly paragraph 3 (xv)of the Order is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Kumar Vijay Gupta & Co.
Chartered Accountants
Firm Registration No. 007814-N
(CA. Mahesh Goel)
Partner
M. No. 088958
Place: New Delhi
Date: 30th May 2017

Annexure - B to the 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 2017 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'). 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.

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 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 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 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Kumar Vijay Gupta & Co.
Chartered Accountants
Firm Registration No. 007814-N
(CA. Mahesh Goel)
Partner
M. No. 088958
Place: New Delhi
Date: 30th May 2017