To the Shareholders of BCPL Railway Infrastructure Limited.
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of BCPL Railway InfrastructureLimited. ("the Company") which comprise the balance sheet as at 31st March2019 and the statement of profit and loss and statement of cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and 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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and its profit/loss and its cash flows forthe year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the
Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
|Key Audit Matter ||Response to Key Audit Matter |
|Insolvency of Joint Venture Partner M/S. EMC Limited Note 30(f) of Notes to Financial Statements ||An amount of Rs.56681969 is involved in three Railway Contracts in which BCPL is a partner with M/S. EMC Limited. Out of Rs. 56681969 Rs. 5000000 is due from M/S. EMC Limited against the invocation of Bank Guarantee that was mobilised by BCPL on behalf of the Joint Venture by the Railways against termination of one contract . As explained by the Management two out of the three contracts are in the final stages of completion and can be completed if M/S. EMC executes the |
|As informed by the Management accounts of the Joint Ventures in which BCPL is a partner have not been prepared for the financial year 2018-19. ||pending works post which the dues of BCPL can be realised. In the opinion of the Management and as per the Minutes of the Meetings between BCPL and EMC EMC would complete the work. Conclusion Keeping in view the understanding of the Management in the matter and documentary evidence of discussion with M/S. EMC Ltd. we agree with the Management's perception. The Management is of the view that in absence of any major activities in the Joint Ventures the financial position or profitability of BCPL is unlikely to experience any major change because of the workings of the Joint Ventures. Conclusion Keeping in view the understanding of the Management in the matter and details of the activities in the Joint Ventures produced before us we agree with the Management's perception. The Management has |
|Non availability of Actuarial Report for provision of Retirement Benefits/Gratuity liability towards employees. Write Back of Advances worth Rs. 1.50 crores received from Customers payable in future. ||informed that they have made an internal assessment of the outflow that would be required as at 31/03/2019 for providing gratuity/retirement benefits for the employees. The internal assessment of the employees have considered liability for even those employees ho have not completed the minimum period of employment for being entitled for Retirement/Gratuity Benefits. Conclusion We have considered the assessment of the Management and are of the opinion that the liability that may arise once the Company gets the Actuarial valuation done may not vary significantly from the provision of Rs. 32.45 lacs already done in the accounts. The management has informed that the advances were received for works that were not started because of shortcomings on the part of the customers. In Management's opinion the amounts written back would not be |
|Conclusion In absence of any material to the contrary we are not in a position to form an alternative opinion. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Directors' Report but does not include the financial statementsand our audit report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Auditor's Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
We draw attention to the following matters in the Notes to the Standalone financialstatements for which no provision has been made in the Accounts:
a) Note No 30a. to the financial statements which describes the disputed demands in thematter of indirect taxes totalling Rs. 41432687 plus applicable interest. b) An Amountof Rs. 3407494 has been claimed by the Company as refund from Income Tax Department butthe Income Tax Department has a counter claim of Rs. 4265938 against non credit of TDSas reflected in Note No. 30e to the financial statements.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement onthe matters specified in paragraphs 3 and 4 of the Order.
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 purpose 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 Sheetthe Statement
of Profit and Loss and the Cash Flow Statement dealt with by this Report are inagreement 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) Rules2014. e. On the basis of written representations received fromthe directors as on March 31 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof Section 164 (2) of the Act f. With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".
g. In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:
I. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note No.30 to the financial statements ;II. The Company did not have any long-term contracts including derivatives contracts forwhich there were any material foreseeable losses.
III. There were no amounts which required to be transferred by the Company to theInvestor Education and Protection Fund.
For Jain Seth & Co.
Firm Regn. No. 002069W
Kolkata May 10 2019
"Annexure A" to the Independent Auditors' Report
Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of the
Company for the year ended March 312019:
1) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and no material discrepancies between the booksrecords and the physical fixed assets have been noticed.
(c) The title deeds of immovable properties are held in the name of the erstwhilepartnership firms M/S. Bapi Construction and M/S. U.K. Construction which have been takenover by the Company w.e.f 01/04/2008.
2) (a) The management has conducted the physical verification of inventory atreasonable intervals.
b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which have been properly dealt with in the books of account were notmaterial.
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 Act. Accordingly the provisions of clause 3 (iii) (a) to (C) of theOrder are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013in respect of loans investments guarantees and security with the exception of thefacilities availed by Phoenix Overseas Ltd. from Bank of India for which CorporateGuarantee of the Company has been given to Bank of India. As informed by the managementBank of India has been requested to release the Company's guarantee as stated above anddecision of Bank of India in this regard is awaited.
5) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
6) As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the
Company has been generally regular in depositing undisputed statutory dues includingProvident Fund Employees State Insurance Income-Tax Sales tax Service Tax Duty ofCustoms Duty of Excise Value added Tax Cess and any other statutory dues with theappropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of the above were in arrears as at March 31 2019for a period of more than six months from the date on which they became payable.
b) According to the information and explanation given to us dues amounting to Rs.41432687 on account of sales tax service tax value added tax are outstanding onaccount of disputes. (Refer Note No.
8) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions other than Banks or from the government and hasnot issued any debentures.
9) Based upon the audit procedures performed and the information and explanations givenby the management the company has raised an amount of Rs. 14.70 crores by way of initialpublic offer of equity shares. In our opinion and according to the information andexplanations given to us the Company has used the funds for the purpose for which thefunds were raised.
10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview.
Accordingly the provisions of clause 3 (xiv) of the Order are not applicable to theCompany and hence not commented upon.
15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with then. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.
For Jain Seth & Co.
Firm Regn. No. 002069W
Kolkata May 10 2019
Annexure - B to the Auditors' Report Dated 10/05/2019
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 the internal financial controls over financial reporting of BCPLRAILWAY INFRASTRUCTURE LIMITED ('the Company') as of 31-03-2019 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
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". 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 onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement 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 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 the risk that the internal financial controlover financial reporting may become inadequate because of changes inconditions 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 March 31 2019 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.
For Jain Seth & Co.
Firm Regn. No. 002069W
Kolkata May 10 2019