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Commercial Engineers & Body Builders Company Ltd.

BSE: 533272 Sector: Engineering
NSE: CEBBCO ISIN Code: INE209L01016
BSE 00:00 | 18 Apr 19.35 0.35
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18.80

HIGH

19.35

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18.75

NSE 00:00 | 18 Apr 19.30 0.35
(1.85%)
OPEN

18.90

HIGH

19.35

LOW

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OPEN 18.80
PREVIOUS CLOSE 19.00
VOLUME 262
52-Week high 30.05
52-Week low 11.07
P/E
Mkt Cap.(Rs cr) 173
Buy Price 18.40
Buy Qty 500.00
Sell Price 19.35
Sell Qty 250.00
OPEN 18.80
CLOSE 19.00
VOLUME 262
52-Week high 30.05
52-Week low 11.07
P/E
Mkt Cap.(Rs cr) 173
Buy Price 18.40
Buy Qty 500.00
Sell Price 19.35
Sell Qty 250.00

Commercial Engineers & Body Builders Company Ltd. (CEBBCO) - Auditors Report

Company auditors report

To

The Members of

Commercial Engineers and Body Builders Co Limited

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements ofCommercial Engineers and Body Builders Co Limited ("the Company") whichcomprise the Balance Sheet as at 31 March 2018 the Statement of Profit and Loss theStatement of Changes in Equity and the statement of Cash Flows for the year then endedand summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Ind AS financial statements that give a true and fair view of thestate of affairs loss (including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under Section 133 ofthe Act.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financialstatements based on our audit.

We have taken into account 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 thereunder.

We conducted our audit of the Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the Ind AS financial statements. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Ind AS financial statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Ind AS financialstatements.

We are also responsible to conclude on the appropriateness ofmanagement's use of the going concern basis of accounting and based on the audit evidenceobtained whether a material uncertainty exists related to events or conditions that maycast significant doubt on the entity's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in theauditor's report to the related disclosures in the financial statements or if suchdisclosures are inadequate to modify the opinion. Our conclusions are based on the auditevidence obtained up to the date of the auditor's report. However future events orconditions may cause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31 March 2018 its loss and other comprehensive income changes in equityand its cash flows for the year ended on that date.

Material Uncertainty Related to Going Concern

We draw attention to Note 49 in the Ind AS financial statements whichindicates that the Company incurred a net loss of INR 3691.27 lakhs during the year ended31 March 2018 and as of that date the company's liabilities exceeded its total assets byINR 6717.72 lakhs. Further the Company has been incurring cash losses affecting itsability to service its borrowings/creditors/ other liabilities and similar obligations. Asstated in Note 49 these events or conditions indicate that a material uncertainty existsthat may cast significant doubt on the company's ability to continue as a going concern.The Management is confident about the positive outcome of the restructuring and continuedsupport of its customers resulting in revival of the operations of the Company.Accordingly the Ind AS financial statements have been prepared by the Company on a goingconcern basis.

Our opinion is not modified in respect of this matter.

Other Matter

The comparative financial information of the Company for the year ended31 March 2017 and the transition date opening balance sheet as at 1 April 2016 included inthese Ind AS financial statements are based on the previously issued statutory financialstatements prepared in accordance with the Companies (Accounting Standards) Rules 2006audited by the predecessor auditor whose report for the year ended 31 March 2017 and 31March 2016 dated 29 May 2017 and 30 May 2016 respectively expressed an unmodified opinionon those financial statements as adjusted for the differences in the accountingprinciples adopted by the Company on transition to the Ind AS which have been audited byus.

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") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the Annexure A a statement on the mattersspecified 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 and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss the Cash FlowStatement and Statement of Changes in Equity dealt with by this Report are in agreementwith the books of account;

(d) In our opinion the aforesaid Ind AS financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act;

(e) The going concern matter described under the 'Material UncertaintyRelated to Going Concern' paragraph above in our opinion may have an adverse effect onthe functioning of the Company;

(f) On the basis of written representations received from the directorsas on March 31 2018 and taken on record by the Board of Directors none of the directorsis disqualified as on 31 March 2018 from being appointed as a director in terms ofSection 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B" to this report;

(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 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Ind AS financial statements - Refer Note 38 to the Ind ASfinancial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to theInvestor

Education and Protection Fund by the Company; and

iv. The disclosures in the financial statements regarding holdings aswell as dealings in specified bank notes during the period from 8 November 2016 to 30December 2016 have not been made since they do not pertain to the financial year ended 31March 2018. However amounts as appearing in the audited Ind AS financial statements forthe period ended 31 March 2017 have been disclosed.

For B S R & Co. LLP

Chartered Accountants

Firm registration No.: 101248W/W-100022

Shashank Agarwal

Partner

Membership No.: 095109

Place : Gurugram

Date: 25 May 2018

Annexure A referred to the Independent Auditor's Report to the Membersof Commercial Engineers and Body Builders Co Limited on Ind AS financial statements forthe year ended 31 March 2018.

(i) (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of its fixed assets.

(b) According to the information and explanations given to us theCompany has a regular programme of physical verification of its fixed assets by whichfixed assets are verified every year. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. As informed to us the discrepancies noticed on such verification were notmaterial and have been properly adjusted in the books of account.

(c) According to the information and explanations given to us and onthe basis of our examination of the books of account the title deeds of immovableproperty are held in the name of the Company.

(ii) The inventory except stocks lying with third parties has beenphysically verified by the management during the year. In our opinion the frequency ofsuch verification is reasonable having regard to the size of the Company and nature of itsbusiness. For stocks lying with third parties at the year-end written confirmations havebeen obtained. As informed to us the discrepancies noticed on verification between thephysical stocks and the book records were not material and have been properly adjusted inthe books of account.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theAct. As informed to us there are no firms covered in the register maintained undersection 189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicable.

(iv) According to the information and explanations given to us inrespect of loans and investments made by the Company the provisions of section 185 and186 of the Act have been complied with. As informed to us the Company has not providedany guarantee or security as specified under Section 185 and 186 of the Act.

(v) According to the information and explanations given to us theCompany has not accepted any deposits from the public. Accordingly paragraph 3(v) of theOrder is not applicable.

(vi) According to the information and explanations given to us theCentral Government has

not prescribed the maintenance of cost records under sub-section (1) ofSection 148 of the Act for any of the goods sold by the Company. Accordingly para 3(vi)of the Order is

not applicable.

(vii)(a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted / accruedin the books of account in respect of undisputed statutory dues including Sales TaxService Tax Duty of Customs Duty of Excise Value Added Tax Cess Goods and ServicesTax ('GST') and other material statutory dues have generally been regularly deposited withthe appropriate authorities though there have been serious delays in deposit of ProvidentFund Employees' State Insurance Value Added Tax and Income Tax.

According to the information and explanations given to us no amountspayable in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Sales Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax Cess Goods and Service Tax and other material statutory dues were in arrearsas at 31 March 2018 for a period of more than six months from the date they became payableexcept as mentioned below:

(INR In Lakhs)

Name of Statute Nature of Dues

Amount

Period to which the Amount Relates

Due Date

Date of Subsequent Payment
MP VAT Act 2002 Value Added Tax

9.67

April 2010 - March 2011

07 Feb 2017

Not Yet Paid
MP VAT Act 2002 Value Added Tax

3.71

April 2015 - March 2016

30 April 2016

Not Yet Paid
Income Tax Act 1961 Tax Deducted at Source

2.56

July 2017

7 Aug 2017

Not Yet Paid
Income Tax Act 1961 Tax Deducted at Source

2.56

August 2017

7 Sep 2017

Not Yet Paid

(b) According to the information and explanations given to us thereare no dues of Income tax Sales tax Service Tax Duty of Excise Value Added Tax andGoods and Service Tax which have not been deposited with the appropriate authorities onaccount of any dispute except as mentioned below:

(INR In Lakhs)

Name of Statute

Nature of Dues

Forum where dispute is pending Period to which the amount relates

Amount Involved*

Amount Paid under Protest

AC Jabalpur April 2009- June 2009

14.37

-

CEC Jabalpur April 2008-April 2016

1217.95

400.00

CEC JSR December 2010- April2018

192.87

-

Central Excise Act1944

Excise Duty

CEC Pitampur Oct 2012- Feb 2014

8.94

-

High Court July 2008 - August 2009

2047.00

-

Madhya Pradesh
CESTAT New Delhi Oct 2009- March 2014

1374.24

107.60

CESTAT Kolkata April 2011-March 2015

3.54

0.53

Commissioner Sep 2010
(Appeals) Bhopal April 2014 to Dec 2014

35.60

-

Appellate Board Bhopal F Y 2007-08

64.41

18.03

MP Commercial Tax Act1994

Value Added Tax

Appellate Board Bhopal F Y 2008-09

63.35

17.78

Supreme Court F Y 2012-13

1406.50

-

MP Entry Tax Act 1976

Entry Tax

Appellate Board Bhopal F Y 2009-10

30.89

8.65

Appellate Board
Bhopal F Y 2007-08

11.02

3.09

Central Sales Tax Act1956

Central SalesTax

Appellate Board Bhopal F Y 2010-11

29.77

28.29

Additional Commissioner Jabalpur F Y 2012-13

6.11

2.81

Dy. Commissioner of
Commercial Taxes
Adityapur Circle April 2011 to
Jharkhand VAT

Value Added

Jamshedpur March 2012

217.20

-

Act 2005

Tax

Dy. Commissioner of
Commercial Taxes
Adityapur Circle April 2012 to
Jamshedpur March 2013

63.97

-

CIT (Appeals)
Kanpur A.Y. 2012-13

15.93

CIT (Appeals)
Kanpur A.Y. 2013-14

594.65

Income Tax Act1956

Income Tax

CIT (Appeals) Kanpur A.Y. 2014-15

-

CIT (Appeals)
Kanpur A.Y. 2015-16

-

* amounts as per demand orders including interest and penalty whereverindicated in the demand.

(viii) According to the records of the Company examined by us and theinformation and

explanations given to us the Company has not defaulted in repayment ofloans or

borrowings to banks and financial institutions except as under :

(INR In Lakhs)

Particulars

Amount of default in repayment

Period of default

Principal

Interest

Dues to Financial Institution :
Tata Capital Financial March 2016 - March
Services Limited

2559.60

1001.65

2018
Dues to Banks :
HDFC Bank Limited

1847.97

330.73

November 2016 - March 2018
Axis Bank Limited

11102.24

2019.88

November 2016 -
March 2018

(ix) In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the company thecompany has not raised money by way of initial public offer or further public offer(including debt instrument) and taken term loan during the year. Accordingly paragraph 3(ix) of the order is not applicable.

(x) Based on our examination of the books of account and according tothe information and explanations given to us no fraud by the Company and no fraud on theCompany by its officers or employees has been noticed or reported during the course of ouraudit.

(xi) Based on our examination of the books of account and according tothe information and explanations given to us the Company has paid / provided managerialremuneration in accordance with the requisite approvals mandated by the provision ofsection 197 read with Schedule V of the Act.

(xii) According to the information and explanations given to us theCompany is not a nidhi

company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) Based on our examination of the books of account and accordingto the information and explanations given to us all transactions with the related partiesare in compliance with section 177 and 188 of the Act where applicable and the detailshave been disclosed in the Ind AS financial statements as required by the applicableaccounting standards.

(xiv) Based on our examination of the books of account and according tothe information and explanations given to us the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith him. Accordingly paragraph 3 (xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us theCompany is not required

to be registered under section 45-IA of the Reserve Bank of India Act1934.

For B S R & Co. LLP

Chartered Accountants

Firm Registration Number: 101248W/W-100022

Shashank Agarwal

Partner

Membership No.: 095109

Place : Gurugram

Date : 25 May 2018

Annexure B to the Independent Auditor's Report of even date on the IndAS

Financial Statements of Commercial Engineers and Body Builders CoLimited

Report on the Internal Financial Controls with reference to financialstatements under

Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls with reference tofinancial statements of Commercial Engineers and Body Builders Co Limited ("theCompany") as of 31 March 2018 in conjunction with our audit of the Ind AS financialstatements 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 andmaintaining internal financial controls based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India ("ICAI"). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing issued byICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the ICAI.

Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operating effectivenessof internal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to financial statements.

Meaning of Internal Financial Controls with reference to Ind ASFinancial Statements

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial statements and the preparation of Financial Statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statements includes those policies andprocedures that ;

(1) Pertain to the maintenance of records that in reasonable detailaccurately and fairly

reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) Provide reasonable assurance regarding prevention or timelydetection of un-authorised acquisition use or disposition of the company's assets thatcould have a material effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls with reference toInd AS

Financial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls

system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as at31 March 2018 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.

For B S R & Co. LLP

Chartered Accountants

Firm registration No.: 101248W /W-100022

Shashank Agarwal

Partner

Membership No.: 095109

Place : Gurugram

Date : 25 May 2018