Ennore Coke Ltd.
|BSE: 512369||Sector: Others|
|NSE: N.A.||ISIN Code: INE755H01016|
|BSE 00:00 | 10 May||Ennore Coke Ltd|
|NSE 05:30 | 01 Jan||Ennore Coke Ltd|
|BSE: 512369||Sector: Others|
|NSE: N.A.||ISIN Code: INE755H01016|
|BSE 00:00 | 10 May||Ennore Coke Ltd|
|NSE 05:30 | 01 Jan||Ennore Coke Ltd|
To the Members of ENNORE COKE LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of ENNORE COKE LIMITED("the Company") which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and loss and the Cash Flow Statement for the year then ended and asummary of significant accounting 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of 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 read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand 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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and disclosures in the financialstatements. 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. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing opinion on whether the Company has inplace an adequate internal financial controls system over financial reporting and theoperating effectiveness of such controls. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India: a) in the case of the Balance Sheet of the stateof affairs of the Company as at March 31 2016; b) in the case of the Statement of Profitand Loss of the Loss for the year ended on that date; and c) in the case of the Cash FlowStatement of the cash flows for the year ended on that date.
Emphasis of Matter
We draw attention of the shareholders for the followings:
a) Note No 31 of Notes to Financial Statements regarding the financial statements beingprepared on a going concern basis notwithstanding the fact that the Company's net worth(Rs. 58 44 38 321) as at March 31 2016 is fully eroded and the consortium of banks haveclassified their debts as Non-Performing Assets. These events indicate the existence of amaterial uncertainty that may cast significant doubt about the Company's ability tocontinue as a going concern. The going concern basis will be significantly impacted ifthe restructuring proposal submitted to the banks is not approved by them.
b) Note No 46 of Notes to Financial Statements regarding non-availability ofconfirmation of balances relating to certain Loans and Advances Trade Payables DepositsAdvance given to a supplier and Loans received.
c) Note No 47 of Notes to Financial Statements regarding inter adjustment of Rs. 144307517/- being dues to a creditor against dues from the holding company M/s Haldia Coke& Chemicals Private Ltd.
d) Note No 48 of Notes to Financial Statements regarding VAT payment of Rs. 7 70 00000/- paid to West Bengal VAT Authorities
e) Note No 49 of Notes to Financial Statements regarding amount of Rs. 10 36 84 384/-written back in respect of dues to a creditor without confirmation from the party.
f) Note No 50 of Notes to Financial Statements regarding adjustment of Input Credit -Excise duty of Rs. 3 88 99 944/-
g) Note No 51 of Notes to Financial Statements regarding non movement in tradereceivable amounting to Rs. 1064955591/-h) Note No 52 of Notes to Financial Statementsregarding non movement in loans & advances aggregating to Rs. 609 42527/- including arelated party.
Our opinion is not qualified in respect of matters mentioned above.
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 ofthe Act we give in the Annexure a statement on the matters specified in the paragraph 3and 4 of the Order to the extent applicable.
2. As required by Section 143 (3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c. The Balance Sheet Statement of Profit and loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account; d. In our opinion theaforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014;
e. The Going concern matter described in sub - paragraph (a) under the Emphasis ofMatters paragraph above in our opinion may have an adverse effect on the functioning ofthe Company.
f. On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in in terms of Section 164 (2) ofthe Act of the Companies Act 2013.
g. With respect to the adequacy of the internal financial controls over the financialreporting of the Company and the operating effectiveness of such controls we refer to ourseparate report Annexure B.
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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements (Refer Note 8 Note 33 and Note 53 to the Notes tofinancial 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. The Company is not required to transfer any amount to the Investor Education andProtection Fund.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF ENNORE COKELIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31 2016
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of Audit we report that: (i)
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification.
(c) The title deed of the leasehold land of Rs. 2 46 37 289/- situated at Haldia WestBengal is registered in the name of the erstwhile amalgamated Company Ennore Power andCoke Private Limited (EPCPL) and has not yet been transferred in the Company's name.
(ii) The verification of inventory other than consumable stores has been conducted atreasonable intervals by an independent technical agency and verification of inventory ofconsumable stores has been conducted by the management. No material discrepancies werenoticed on such physical verification.
(iii) The Company has granted unsecured loans amounting to Rs. 48 95 86 560/- to oneparty covered in the register maintained under Section 189 of the Companies Act 2013("the Act"). There are no terms and conditions stipulated for the unsecuredloans granted including the repayment of principal and interest and hence we are unable tocomment:
(a) Whether the terms and conditions stipulated are prejudicial to the interest of thecompany except that the non-charging of interest on this loan is prejudicial to theinterest of the Company.
(b) Whether the repayment is regular or not.
(c) Whether the loans are overdue for more than 90 days as well as to the reasonablesteps taken by the company for recovery of the principal and interest.
(iv) In respect of the loans guarantees and security provided the provisions ofSection 185 and Section 186 have been complied with by the company.
(v) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed thereunder. Accordinglyreporting under clause 3(v) of the Order does not arise.
(vi) The central Government has prescribed maintenance of cost records under subsection(1) of Section 148 of the Companies Act in respect of company's products effective June2014 However the Company has not maintained the cost records prescribed.
(vii) Undisputed statutory dues towards Income tax Sales Tax (VAT) Service TaxCustoms Duty Excise Duty Cess and other material statutory dues have been regularlydeposited with the appropriate authorities and there have been delays in remittance in fewcases.
Undisputed amounts payable in respect thereof which were outstanding at the year- endfor a period of more than six months from the date they became payable are as follows:
(b) There are dues in respect of income tax entry tax CST VAT and service tax thathave not been deposited with the appropriate authorities on account of dispute asmentioned below:-
(viii) In our opinion and according to the information and explanations given to us inthe following instances the Company have defaulted in repayment of dues to banks duringthe year
Further the company does not have any dues to financial institution or debentureholders during the year.
(ix) According to the information and explanations given to us the Company has notraised money by way of initial public offer or further public offer and has not availednew term loans during the year. Accordingly the provisions of clause 3(ix) of the Orderare not applicable. (x) According to the information and explanations given to us nomaterial fraud on or by the Company has been noticed or reported by its officers oremployees during the course of our audit.
(xi) According to the information and explanations given to us no managerialremuneration has been paid or provided during the year. Accordingly the provisions ofclause 3(xi) of the Order are not applicable.
(xii) The company is not a Nidhi Company. Accordingly the provisions of clause 3(xii)of the Order are not applicable.
(xiii) In our opinion and according to the information and explanations given to usall the transactions are in compliance with sections 177 and 188 of the Companies Act2013 where applicable and the details have been disclosed in the Financial Statementsetc. as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us the company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review.
(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with thedirectors during the year. Accordingly reporting under clause 3 (xv) of the Order doesnot arise.
(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly reporting under clause 3 (xvi) of the Order does not arise.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF ENNORE COKE LIMITED
Report on the Internal Financial Controls under Clause (j) of Sub-section 3 of Section143 of the Companies Act. 2013 ('Act')
We have audited the internal financial controls over financial reporting of Ennore CokeLimited ("the Company") as of March 31 2016 in conjunction with our audit ofthe 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating 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.
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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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
(i) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(ii) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(iii) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
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 2016 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.