To the Members of Coral Newsprints Limited
Report on the Financial Statements
We have audited the accompanying Standalone financial statements of Coral News PrintsLtd ('the company') which comprises the Balance Sheet as at March 31 2018 the Statementof Profit and Loss(Including Other Comprehensive Income) and statement of changes inequity and statement of Cash flows for the year then ended and a summary of significantaccounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 ('the Act') with respect to the preparation of theseStandalone financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income Cash flow and changes inequity of the Company in accordance with the Indian Accounting standards (IND AS)prescribed under section 133 of the Act read with Companies (Indian accounting standards)Rules 2015 as amended and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the act for safeguarding the assets of the company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation & presentation of the Standalonefinancial statements that's give a true & fair view & are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Standalone financial statementsbased on our audit. In conducting our audit We have taken into account the provisions ofthe Act the accounting & auditing standards & the matters which are required tobe included in the audit report under the provisions of the Act & the Rules made thereunder and the order issued under section 143(11) of the Act.
We conducted our audit in accordance with the Standards on Auditing specified u/s. 143sub section 10 of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Standalone financial statements. The procedures selected depend onauditor's judgment including the assessment of the risks of material misstatement of theStandalone financial statements whether due to fraud or error. In making those riskassessments the auditors consider internal financial controls relevant to the Company'spreparation of the Standalone financial statements that gave a true & fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by Company's Directors as well asevaluating the overall presentation of the 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.
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 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 2018 and its loss total comprehensive income changes in equity and itscash flows for the year ended on that date.
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 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 Sheet statement of Profit and Loss Including Other ComprehensiveIncome and statement of changes in equity and statement of Cash flows dealt with by thisreport are in agreement with the books of accounts.
d) In our opinion the aforesaid Standalone financial statements comply with IndianAccounting Standards specified u/s. 133 of the Act.
e) On the basis of written representations received from the Directors as on March312018 and taken on record by the Board of Directors none of the directors aredisqualified as on March 312018 from being appointed as a director in term of section164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness or such controls refer to ourseparate report in "Annexure A" our report express an unmodified opinion onadequacy and operating effectiveness on companies internal financial controls overfinancial reporting
g) 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 2014As amended 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 its FinancialPosition in its Standalone financial statements- Refer Note 28.
ii) In our opinion and as per the information and explanations provides to us thecompany has not entered into any long term contracts including derivative contractsrequiring provision under applicable laws or Accounting Standards for materialforeseeable losses and
iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection fund by the Company.
As required by the Companies (Auditor's Report) Order 2016 ("the order")issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure B a statement on the matters specified in paragraphs 3 and 4 of theOrder.
| ||For Gulvardhan Malik & Co. |
| ||Chartered Accountants |
| ||Firm Reg. No:028432N |
| ||G. MALIK |
|Place : New Delhi ||Proprietor |
|Date : 28-05-2018 ||Membership No 503403 |
" ANNEXURE A" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to paragraph 1(f) under Report on Other legal and Regulatory Requirementssection of our report to the member of Coral News Print Limited of even date)
Report on the Internal Financial Controls under Clause (i) of sub section (3) ofSection 143 of the
Companies Act 2013. (" the Act")
We have audited the internal financial controls over financial reporting of Coral Newsprints Limited ( " the company") as of 31st March 2018 in conjunction with ouraudit of the standalone financial statements of the company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The board of directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the company considering the essential components of internalcontrol stated in the Guidance note on audit of internal financial control over financialreporting issued 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 financial controlover financial reporting based on our audit. We conducted our audit in accordance with theguidance note on audit of internal financial control over financial reporting (the "guidance note") and the standards on auditing issued by ICAI and standards onauditing prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controlsThose standards and the guidancenotes require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures to obtainaudit evidence about the adequacy of the internal financial control system over financialreporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk.The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto 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 controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statement 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 asset of the company (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparations of financial statements inaccordance with generally accepted accounting principles and receipts and expenditure ofthe company are being made only In accordance with authorization of management and thedirector of the company and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition use or disposition of the company's assetsthat 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 may 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 to the best of our information and according to explanation given to usthe company has in all material respects an adequate internal financial controls systemover financial reporting and such internal financial controls over financial reportingwere operating effectively as at 31st March 2018 based on the internal controls overfinancial reporting criteria established by the company considering the essentialcomponents of internal controls stated in the guidance note on audit of internal financialcontrols over financial reporting issued by the Institute of Chartered Accountants ofIndia.
| ||For Gulvardhan Malik & Co. |
| ||Chartered Accountants |
| ||Firm Reg. No:028432N |
| ||G. MALIK |
|Place : New Delhi ||Proprietor |
|Date : 28-05-2018 ||Membership No 503403 |
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2 under Report on Other legal and Regulatory Requirementssection of our report to the member of Coral News Print Limited of even date).
1. In respect of company's fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has a program of verification of its fixed assets in a phased mannerwhich in our opinion is reasonable having regard to the size of the company and nature ofthe fixed assets pursuant to the program certain fixed assets are physically verifiedby management during the year. According to the information and explanations given to usno material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us the report examined byus and based on examination of the conveyance deeds provided to us we repost that titledeeds comprising all the immovable properties of land and buildings which are freeholdare held in the name of the company as at balance sheet date and the company does nothave any immovable property land and building taken on lease.
2) (a) In Our Opinion and accordance to the information and explanations given to usthe company is maintaining proper records of its inventories showing full particulars.
(b) As informed to us the Inventory has been physically verified at the year end bythe management and no material discrepancies were noticed on such verification in ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the company and the nature of its business.
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.
4) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the company the company has not made anyloans investment guarantee and security during the year which are covered under section185 & 186 of the Companies Act 2013 hence para 3 (iv) is not applicable.
5) The Company has not accepted deposits during the year and does not have anyunclaimed deposit as at 31st March 2018 and therefore the provision of clause 3(v) ofthe order are not applicable to the company.
6) The maintenance of cost records has not been specified the Central Government undersection 148(1) of the Companies Act for the business activities carried out by thecompany. Thus reporting under clause 3(vi) of the order is not applicable to the company.
7) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the company amount deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax value added tax duty of custom service tax cess G.S.T and other materialstatutory dues have been regularly deposited during the year by the company with theappropriate authorities
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess GST and other material statutory dues were in arrear as at31st March 2018 for a period of more than six month from the date they become payableexcept the previous year dues of related to Provident fund TDS Entry Tax withappropriate authorities having an arrear of Rs 308668/- w.r.t Provident fund and Rs11863/- w.r.t TDS and Rs. 55187/- Wr .t Entry Tax as on 31.03.2018.
(b) According to the information and explanations given to us the details of dues ofIncome tax sales tax and water cess which have not been deposited as on 31st March 2017on account of disputes are given below :
|S.No. ||Name of Statue ||Nature of Dues ||Amount (Rs.) ||Period to which the amount relate ||Forum where Dispute is pending |
|1. ||Income tax Act1961 ||Income Tax ||216322 ||A.Y 1996-97 ||Hon'ble Delhi High Court |
|2. ||Income tax Act1961 ||Income Tax ||269105 ||A.Y 1996-97 ||Hon'ble Delhi High Court |
|3. ||Centals Sales Tax Act And Sales tax Act of Various States ||Sales Tax ||646883 ||A.Y 2003-04 ||Addll comm (Appeals) |
|4. ||UPPCB ||Water Cess ||1389212 ||various years ||UPPCB |
8) In our opinion and according to the information and explanations given to us thecompany has defaulted in repayment of loans or borrowing to a financial institution bankand government;-
a) Term loan from PICUP has been Settled For OTS (One Time Settlement) vide letterDated -13-10-2011 for an amount of Rs. 200 Lacs .Against this the company has paid Rs.30Lacs in FY-2011-12 & Rs.170.86 Lacs till 31.03.2013 including finance charges.
As per letter Dated 07.02.2013 received From PICUP the company has to pay RCCollection charges @10% of OTS amount within one month time as per the rules of PICUP.The Company has informed the PICUP that as per their information there are no recoverycertificates pending against any of the Guarantors & requested them to issue NOobjection certificate but PICUP has requested No Due certificates from various Tehsils/ DMin respect of dues against guarantors which are still awaited.
Due to the above facts finalization of recovery of RC collection charges is stillpending & hence no provision has been made in the books of accounts. However as perexplanation given to us the company is in process of obtaining No Dues Certificate fromPICUP.
b) The company had already paid OTS amount of UPFC loan in the previous years. Howeverin respect of the DADP interest demanded by UPFC(i.e. Rs. 51.83 lacs) vide its letterdated 24.03.2011 against which the company has requested for a waiver of 75% vide itsletter dated 04.08.2011 in respect of which BIFR board has directed waiver of 50% of DADPdemand as per its order dated 23.05.2012.
Hence as per the BIFR Board's order DADP demand would comes out to Rs. 25.92 Lacs.
Further on the basis of BIFR direction the company has requested for a waiver of 50%of DADP amount vide letter dated 09.02.2013 but UPFC rejected the request vide letterdated 04.03.2013 stating that waiver cannot be granted as per approved guidelines of thecorporation.
However UPFC vide its letter dated 10.2.2014 has asked the company to submit fresh OTSwith 10% amount of outstanding principal as earnest money within 15 days of issue of thisletter.
The company has filed its objection against this letter & requested to follow theBIFR Order for waiver of 50% of DADP interest.
BIFR vide its order dated 12.11.2014 has approved the draft Rehabilitation Scheme ofthe company & waived of 50% of the DADP amounting which stood at Rs. 25.92 lacsagainst which the company has paid Rs.21.82 lacs till 31.03.2016. Against this order ofBIFR the UPFC has approached AIFR.
However the ministry of finance has appointed 1st December 2016 as the date on whichprovisions of sick industrial companies (special provisions) Repeal Act 2003 shall comeinto force. Therefore the SICA is repealed wef from 1st December 2016. The BIFR and AIFRstand dissolved with effect from 1st December 2016 and all the proceeding before themstand abated. Therefore the outstanding of the company with UPFC shall be revised As perinformation and explanation given to us & the company not received any letter fromUPFC for recovery of Dues till the date our Audit Report.
c) No confirmation of closing balance was available in respect of interest due to UPFC& due to above facts no provision of DADP interest on UPFC loan was made in the booksof accounts during the year.
Further the company has not issued any debentures.
9) The company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3(ix) ofthe order is not applicable to the Company.
10) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the company by its officersor employees has been noticed or reported during the year.
11) In our opinion and According to the information and explanations given to us thecompany has paid/provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
12) The company is not a nidhi company and hence reporting under Clause 3(xii) of theOrder is not applicable to the Company.
13) In our opinion According to the information and explanations given to us thecompany is in compliance with section 177 and 188 of the companies act 2013 whereapplicable for all transactions with the related parties and the details of relatedparties transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards
14) During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reposting underClause 3(xiv) of the order is not applicable to the company.
15) In our opinion and According to the information and explanations given to usduring the year the company has not entered into any non-cash transactions with itsdirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act2013 are not applicable to the company.
16) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For Gulvardhan Malik & Co. |
| ||FRN: 028432N |
| ||CHARTERED ACCOUNTANTS |
| ||(G. MALIK) |
|Place : New Delhi || |
| ||Proprietor |
|Date : 28-05-2018 || |
| ||Membership No. 503403 |