To the Members of
BURNPUR CEMENT LIMITED
I. Report on the Audit of the Standalone Financial Statements
A. We have audited the accompanying Standalone Financial Statements of BURNPUR CEMENTLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2020the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the Standalone Financial Statements").
B. 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) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 the loss and totalcomprehensive income changes in equity and its cash flows for the year ended on that date
2. Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.
3. 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.
The management has been changed by UV ARC Limited w.e.f. 1st October 2019. It wasobserved by the new management that the company as per the decision of the old managementhas not charging interest on the secured loans for the F.Y 2017-18 2018-19. The newmanagement decided to charge interest for the F.Y. 2017-18 and 2018-19 as per the ratementioned in loan agreement entered into between company and consortium lenders and showit in prior period expenditure. Interest for the current period i.e. F.Y. 2019-20 has beencharged and shown in the Profit and Loss Account under the head "Finance Cost".
4. Emphasis of Matters Paragraph
Interest on loan taken from secured financial creditors for the prior periods amountingto Rs 753318952/- (Rs 3489 03811 for the F.Y. 2017-18 and Rs 404415141 for theF.Y. 2018-19) has been charged to the Statement of Profit & Loss Account under priorperiod item in the current year in accordance with the decision of the new management inpursuant to assignment of financial assets to UVARCL under section 5 of the SARFAESI ACT2002. The provision for interest of Rs.468573044/- has been charged to statement ofprofit and loss for the current period. Payment of interest amounting to Rs. 19300000/-to UVARCL should have been disclosed as a related party transaction at arm's length priceas because they have changed the management of the company under section 9(1)(a) of theSARFAESI ACT 2002.
Our opinion is not qualified in respect of these matters.
5. Material uncertainty related to going concern
We also draw attention to the fact that the Company has accumulated loss of Rs22997.08 lakhs resulting in erosion net worth of the Company. The net worth of theCompany is negative (i.e. -14384.64 lakhs). The financial statements of the company havebeen prepared on a going concern basis for the reason stated in the financial statement.The validity of the going concern assumption would depend upon the performance of thecompany as per its future business plan. Our opinion is not qualified in respect of thismatter.
6. Information Other than the Standalone Financial Statement and Auditor Report Thereon
A. 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 Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the Standalone Financial Statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon
B. In connection with our audit of the financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone Financial Statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.
7. Management's Responsibility for the Standalone Financial Statements
A. 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 totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
B. 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 responsible for overseeing the Company's financial reportingprocess.
8. Auditor's Responsibilities for the Audit of the Standalone Financial Statements
A. 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.
B. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also :
i) Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
ii) Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to financial statements inplace and the operating effectiveness of such controls
iii) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management
iv) Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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
v) Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation
C. 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 Standalone Financial Statements may be influenced. Weconsider
quantitative materiality and qualitative factors in
i) planning the scope of our audit work and in evaluating the results of our work; and
ii) to evaluate the effect of any identified misstatements in the Standalone FinancialStatements.
D. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
E. 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.
F. 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
II. Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit 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 the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account
D. In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules2014
E. On the basis of the written representations received from the directors as on March31 2020 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) of theAct.
F. With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols with reference to financial statements.
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 as amended :
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the 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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i) The Company has not disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements
ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company if any.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
| ||For K PANDEYA AND CO. |
| ||Chartered Accountants |
| ||FRN : 0000135C |
| ||MANJEET KUMAR VERMA |
| ||Partner |
|Place : Patratu ||M. No.075926 |
|Date : 24.06.2020 ||UDIN : 20075926AAAACF1854 |
ANNEXURE-A TO THE AUDITORS' REPORT- CARO
The Annexure referred to in our report to the members of BURNPUR CEMENT LIMITED for theyear
ended 31st March 2020.
On the basis of the information and explanation given to us during the course of ouraudit we report that:
1. (a) The company has maintained record of fixed assets but the location/ situation ofthe details were
(b) As informed by the management fixed assets have been physically verified by themanagement during the year.
(c) According to the information and explanations given to us and on the basis of ourexaminations of the records of the Company the title deeds of immovable properties whichare held in the name of the Company except for the following freehold land :-
|Particulars ||Book Value ||Remarks if any |
|Land at Palashdiha Panchgachia Road Asansol ||21214331.00 ||The title deed is in the erstwhile name of the Company i.e. Ashoka Concrete & Allied Industries (P) Ltd. |
2. Physical verification of inventory has been conducted at reasonable intervals by themanagement.
3. The company has granted loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013.(Annexure-1)
(a) All terms and conditions are as per the benefits of company and are not prejudicialto the company's Interest.
(b) Schedule of repayment of principal and interest not found.
(c) There is no such amount which is overdue more than 90 Days of above mentioned loan.
4. In respect of loans investments guarantees and security all mandatory provisionsof section 185 and 186 of the Companies Act 2013 have been complied with.
5. The company has not accepted any deposits.
6. Maintenance of cost records has not been specified by the Central Government undersub-section (1) of section 148 of the Companies Act 2013.
7 (a) The company is generally irregular in depositing undisputed statutory duesincluding provident
fund Employee's state insurance income-tax sales-tax service tax duty of customsduty of excise value added tax cess and any other statutory dues to the appropriateauthorities. As per the financial statement Rs. 1207.93 lakhs is due to GovernmentAuthorities.
(b) Dues of income tax or sales tax or service tax or duty of customs or duty of exciseor value added tax have been deposited on time there is no dispute is pending on the partof company. (Annexure-2)
8. The company has made defaults in repayment of loans or borrowing to a financialinstitution bank Government or dues to debenture holders and the same have become NPA.(Annexure -3)
9. The company doesn't raise any money by way of initial public offer or further publicoffer (including debt instruments)
10. Neither company has done any fraud nor by its officers or employees so nothing tobe disclosed separately.
11. Managerial remuneration has been paid or provided in accordance with the requisiteapprovals Mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.
12. Company is not a Nidhi Company hence nothing to be disclosed for any provisionsapplicable on Nidhi Company.
13. All transactions with the related parties are in compliance with sections 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements etc. as required by the applicable accounting standards;
14. As per the explanation and information provided by the management the companyhasn't made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year.
15. As informed to us the company hasn't entered into any non-cash transactions withdirectors or persons connected with him.
16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
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 BURNPURCEMENT LIMITED. ("The Company") as of 31 March 2020 in conjunction with ouraudit of the financial statements of the Company for the year ended on that 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.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of 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 in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2020 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 K PANDEYA AND CO. |
| ||Chartered Accountants |
| ||FRN : 0000135C |
| ||MANJEET KUMAR VERMA |
|Place : Patratu ||Partner |
|Date : 24.06.2020 ||M. No.075926 |