THE MEMBERS OF
JAYASWAL NECO INDUSTRIES LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying Financial Statements of JAYASWALNECO INDUSTRIES LIMITED ("the Company") which comprise the BalanceSheet as at March 31 2020 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and statement of Cash Flows forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "the Financial Statements").
In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the matter described inthe Basis for Qualified Opinion' para below the aforesaid FinancialStatements give the information required by the Companies Act 2013 ("the Act")in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 and its loss including other comprehensive income changes in equity and its cashflows for the year ended on that date.
Basis for Qualified Opinion
As mentioned in Note no.18.10 to the Financial Statements Non CurrentBorrowings include an amount of Rs. 207711.72 Lakhs due to certain banks and AssetsReconstruction Company. Banks holding 94.18% (by value) of the total principal debtequivalent to Rs. 339353.50 Lakhs assigned all their rights title and interests infinancial assistances granted by them to the Company in favour of Assets Care &Reconstruction Enterprise Limited acting in its capacity as Trustee of eight differentTrusts (ACRE). Until the revised terms and condition will be agreed between the Companyand ACRE the arrangement with those banks are valid and as per the arrangements withthose banks the Company is required to comply with certain covenants as referred in thesaid note and non-compliance with these covenants may give rights to the banks/ACRE todemand repayment of the loans. As at March 31 2020 the Company has not complied withcertain covenants and they have not been provided with any confirmation from those lendersfor extension of time to comply with these covenants. The Company has not classified theseliabilities as current liabilities as required by Indian Accounting Standards (Ind AS) 1 -"Presentation of Financial Statements".
We conducted our audit in accordance with Standards on Auditing (SAs)specified under section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the Financial Statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note no. 36 to the Financial Statements regardingpreparation of Financial Statements of the Company on going concern basis notwithstandingthe fact that the Company continued to incur cash losses it's net worth has beenfully eroded impairment of certain non-current assets (Refer Note No. 2.11) loans havebeen called back by few of the secured lenders application has been made to NationalCompany Law Tribunal (NCLT) Mumbai under section 7 of the Insolvency and BankruptcyCode 2016 (IBC) by State Bank of India the erstwhile lead secured lender which has beencontested by the Company for the reasons stated in the said note. These conditionsindicate the existence of a material uncertainty that may cast significant doubt on theCompany's ability to continue as going concern. Banks holding 94.18% (by value) ofthe total principal debt equivalent to Rs. 339353.50 Lakhs assigned all theirrights title and interests in financial assistances granted by them to the Company infavor of Assets Care & Reconstruction Enterprise Limited acting in its capacity asTrustee of eight different Trusts (ACRE). The appropriateness of assumption of goingconcern is critically dependent upon the Company's ability to raise requisite financeand generate cash flows in future to meet its obligations and to restructure its borrowingwith the lenders.
Our opinion is not modified in respect of this matter.
Emphasis of Matters
We draw your attention to :
i) Note no. 45 to the Financial Statements which describes theuncertainties related to COVID-19 and its consequential effects on the affairs of theCompany.
ii) Note no. 2.08 to the Financial Statements regarding the attachmentof the properties of the Company to the extent of Rs. 30758.39 lakhs by the Directorateof Enforcement which has been contested by the Company and presently stayed.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Financial Statements of the current period.These matters were addressed in the context of our audit of the Financial Statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
|Key Audit Matter ||How our audit addressed the key audit matter |
|1) Impairment of Property Plant and Equipment (PPE) and Capital Work in Progress (CWIP): || |
|As at March 31 2020 carrying value of PPE and CWIP is Rs. 428184.66 lakhs which constitutes 74.31% of the total assets of the Company. ||Our audit procedure included among others: |
|As per Ind AS 36 "Impairment of Assets" in assessing whether there is any indication that an asset may be impaired as entity shall consider as a minimum the external and internal sources of information any other indication or evidences from internal reporting that indicates that the asset may be impaired. || Updating our understanding of management's annual impairment testing process. |
|The existence of an impairment indicator is significantly influenced the Company has been incurring cash losses its net worth has been fully eroded and COVID - 19 Pandemic has impacted its business. Management concluded that the recoverable amount of certain PPE and CWIP were lower than their carrying values and accordingly the Company has made a provision of Rs. 56816.68 Lakhs as an impairment loss. These conclusions are dependent upon significant management judgement including in respect of: || Assessing internal controls designed for identification of impairment indicators. |
|-Estimated utilization disposal values and || Ensuring that the methodology of the impairment exercise continues to comply with the requirements of Ind AS as adopted including evaluating management's assessment of indicators of impairment against indicators of impairment specified within Ind AS 36. |
|-Estimated resale values provided by an independent external valuer. || Assessing the appropriateness of the Company's valuation methodology applied in determining the recoverable amount. In making this assessment it took into consideration the valuation report of the specialist involved by the Company. It also required evaluating the objectivity independence and competency of specialists involved in the valuation process. |
|We considered this matter as key audit matter due to the significance of the carrying value of the assets being assessed and due to the level of management judgement required in the assumptions impacting the impairment assessment and the sensitivity of the impairment model. || Verifying the completeness of disclosure in the financial statements as per Ind AS 36. |
|Refer Note no. 2 to the Financial Statements. || |
|2) Inventories || |
|As of March 312020 inventories appear in the Financial Statements for an amount of Rs. 85385.84 lakhs constitutes 14.82% of the total assets of the Company. Inventories are valued at the lower of cost and net realizable value. ||Our audit procedure included among others: |
|The Company may recognize an inventory allowance if inventory items are damaged if the selling price has declined or if the estimated costs to completion or to be incurred to make the sale have increased. || Reviewing the Company's process and procedure for physical verification of the Inventories and accounting for the same. |
|We considered this matter as key audit matter due to the: || Obtaining the physical inventory count reports of the Management as per verification plan which were conducted in the presence of internal auditors of the Company and discussing with the internal auditors about the Control checks performed by the internal auditors. |
| Significance of the inventories balance. || |
| Complexities involved in determining quality of inventories and quantities on hand due to the number weight location diversity of inventory storage locations Valuation procedure including valuation of obsolete inventories. || Assessing the methods used to value inventories and ensuring the consistency of accounting methods. |
|Refer note no. 1(C)(VI) and 7 to the Financial Statements. || Testing by sampling the effectiveness of the controls set up by Management to prevent or detect possible errors in valuation of inventories. |
| || Analyzing the company's assessment of net realizable value as well as reviewing the assumptions and calculations for stock obsolescence. |
| || Verifying the completeness of disclosure in the Financial Statements as per Ind AS 2. |
| || Obtaining representation letter from the management as per SA 580 (revised) - Written representations. |
|3) Litigation and Regulatory Claims || |
|The Company is subject to number of significant litigations. ||Our audit procedure included the following : |
|Major risks identified by the Company in that area related to Energy Development Cess Attachment of the Company's property by the Directorate of Enforcement Application filed by a lender to NCLT under IBC for the recovery of loan Arbitration with the vendors / suppliers other litigation with Government authorities etc. The amount of litigation may be significant and estimates of the amounts of provisions or contingent liabilities are subject to significant Management judgment. (Refer Note No. 2.06 2.07 2.08 2.09 22.05 26.0135 and 36 to the Financial Statements) || Assessing the procedures implemented by the Company to identify and gather the risks it is exposed to. |
|Due to complexity involved in these litigation and regulatory claims management's judgment regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. Accordingly it has been considered as a key matter. || Obtaining an understanding of the risk analyses performed by the Company with related supporting documentation and studying written statements from internal and external legal experts where applicable. |
| || Discussion with the management on the development in these litigations during the year. |
| || Enquiring from the company's legal counsel (internal/ external) and study the responses as received from them. |
| || Verification that the accounting and / or disclosure as the case may be in the financial statements made by the Company is in accordance with the assessment of legal counsel / management based on the information currently available with the Company. |
| || Obtaining representation letter from the management on the assessment of these matters as per SA 580 (revised) - Written representations. |
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the management discussion & analysis anddirector's report included in the annual report but does not include the FinancialStatements and our auditor's report thereon.
Our opinion on the Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Financial Statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Financial Statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information; we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these FinancialStatements that give a true and fair view of the state of affairs (financial position)loss (financial performance including other comprehensive income) cash flows and changesin equity of the Company in accordance with the accounting principles generally acceptedin India including Indian Accounting Standards (Ind AS') prescribed underSection 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of 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 Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the Financial Statementsmanagement is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so. Those Board ofDirectors are also responsible for overseeing the Company's financial reportingprocess
Auditors' Responsibility for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether theFinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Financial Statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the 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.
Obtain an understanding of internal financial controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3) (i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theability of the Company to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Financial Statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of theFinancial Statements including the disclosures and whether the Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the FinancialStatements of the current year and are therefore the key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. 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 purposes of ouraudit;
b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss (Including othercomprehensive income) the Statement of cash flows and the Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;
d. In our opinion except the matter described in the "Basis forQualified Opinion" paragraph above the aforesaid Financial Statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act read with relevantrules thereunder;
e. The going concern matter described in "Material UncertaintyRelated to Going Concern" paragraph above in our opinion may have an adverse effecton the functioning of the Company.
f. On the basis of the written representations received from thedirectors as on March 31 2020 and taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director in termsof Section 164 (2) of the Act.
g. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A".
h. With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:
In our opinion and to the best of our information and according to theexplanations given to us the managerial remuneration aggregating of Rs. 131.57 Lakhs paidto the whole time directors of the Company during the year ended March 31 2020 issubject to approval from the shareholders of the Company as required under the Act.
i. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Financial
Statements as referred to in Note No. 2.06 2.07 2.08 2.09 22.0526.01 35 and 36 to the Financial Statements;
ii. The Company has made provisions as required under the applicablelaw or Ind AS for material foreseeable losses if any on long term contracts includingderivative contracts;
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.
2. 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 theAct we give in "Annexure B" hereto a statement on the matters specifiedin paragraphs 3 and 4 of the Order.
"ANNEXURE A" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 (g) under Report on Other Legal andRegulatory Requirements' of our report of even date to the members of Jayaswal NecoIndustries Limited on the financial statements for the year ended March 31 2020) Reporton the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting ofJAYASWAL NECO INDUSTRIES LIMITED (the Company') as of March31 2020 in conjunction with our audit of the Financial Statements of the Company for theyear 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 over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the Guidance Note') issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note issued by the ICAI and the Standards ofAuditing prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote 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 obtain audit evidence aboutthe adequacy of the internal financial controls and their operating effectiveness. Ouraudit of internal financial controls over financial system over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the 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 internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financialreporting includes those control over policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions reflect are recordedas necessary 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 authorizations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection 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 FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected.
Also projections of any evaluation of the internal financial controlsover financial reporting to future periods are subject to the risk that the internalfinancial control over financial reporting may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.
ANNEXURE "B" TO INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2 under the heading "Report on OtherLegal and Regulatory Requirements" of our report of even date to the members ofJayaswal Neco Industries Limited on the Financial Statements for the year ended March 312020)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets on the basis of availableinformation.
b. As explained to us the Company has physically verified certainassets in accordance with a phased program of verification which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such physical verification as compared with theavailable records.
c. According to the information and explanations given to us the titledeeds of immovable properties are generally in the name of the Company except in respectof 5 immovable properties at Raipur having the aggregate value of Rs. 31 lakhs in respectof which the documents are not registered in the name of the company with the concernedGovernment Authority and also in case of properties acquired by the entities or unit thathave since been amalgamated/merged with the Company in pursuance to the scheme ofamalgamation / demerger / arrangement approved by Hon'ble High Court and details ofwhich are as under:
(Rs. in lakhs)
|Particulars of the Land and Building ||Leasehold/Freehold Land /Building ||Net Block as at March 31 2020 ||Remarks (give reasons for the exception) |
|1 4 immovable properties land at Raipur (1 agreement pledge with the lender) ||Leasehold Land ||1798.63 ||2 title deeds are in the name of Corporate Ispat Alloys Limited from where the unit demerged and acquired by the Company and 2 title deeds are in the name of Nagpur Alloy Castings Limited erstwhile Company that was amalgamated with the Company under the Companies Act 1956. |
|2 7 immovable properties (land / building) at Raipur / Nagpur / Kolkata (4 agreements equitable mortgage with the lenders) ||Free hold land / building ||63.76 ||The title deeds are in the name of Jayaswal Neco Limited (earlier known as Jayaswal Chemical Private limited) erstwhile Company that was amalgamated with the Company under the Companies Act 1956. |
As informed to us in respect of 59 immovable properties having theaggregate value of Rs. 679.54 lakhs the original title deeds have been deposited with thelenders as security we have been produced photocopies of documents for those immovableproperties and based on such documents the title deeds are held in the name of theCompany except 5 immovable properties as disclosed above. ii. In respect of itsinventories:
As explained to us inventories have been physically verified duringthe year by the management except for inventories in transit / with job worker for whichmanagement confirmation has been received. In our opinion the frequency of verification isreasonable. Discrepancies noticed on physical verification of physical inventories andbook records were not material having regard to the size of the operations of theCompany and the same have been properly dealt with.
iii. In respect of loans secured or unsecured granted by the Companyto companies firms Limited liability partnerships or other parties covered in theregister maintained under section 189 of the Act:
a. In the earlier years the Company had granted unsecured loan to onesuch Company and the terms and conditions on which the loan had been granted were notprima facie prejudicial to the interest of the Company.
b. The terms of repayment of principal and payment of interest havebeen stipulated and during the previous year the principal and interest were due forpayment but due to the financial crisis the party has not paid the same.
c. The amount is overdue and the Company has considered the said loanand interest receivables as doubtful and has been fully provided for.
iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct in respect of grant of loans making investments and providing securities.
v. According to the information and explanations given to us theCompany has not accepted any deposits from the public. Therefore the provisions of clause(v) of paragraph 3 of the Order are not applicable to the Company.
vi. We have broadly reviewed the cost records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 prescribed by the CentralGovernment under Section 148(1)
(d) of the Act as applicable and are of the opinion that prima faciethe prescribed accounts and records have been maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
vii. According to the information and explanations given to us inrespect of statutory dues:
a. The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income taxCustoms Duty Excise Duty Cess Goods and Service Tax and any other statutory dues withthe appropriate authorities during the year except in certain cases.
According to the information and explanations given to us noundisputed amounts payable in respect of such statutory dues were outstanding as at March31 2020 for a period of more than six months from the date they became payable.
b. Details of dues of Duty of Custom Duty of Excise Service TaxSales Tax and Value Added Tax aggregating to Rs. 1318.33 lakhs that have not beendeposited on account of disputed matters pending before appropriate authorities are asunder:
|Nature of Dues ||Statute ||Period Involved ||Amount (Rs. in lacs) (*) ||Forum where dispute is pending |
|Custom Duty ||Custom Act 1962 ||2014-16 ||78.56 ||CESTAT |
| || ||2004-05 ||100.00 ||Commissioner |
|Excise Duty ||Central Exercise Act 1944 ||2009-16 ||139.77 ||CESTAT |
| || ||2005-09 & 2015-18 ||230.34 ||CESTAT |
|Service Tax ||Finance Act 1994 ||2015 -18 ||13.71 ||Commissioner |
| || ||2008-09 ||9.40 ||High Court |
| || ||2007-08 2009-10 & 2011- 17 ||704.92 ||Chairman Tribunal |
|Sales Tax / ||Central Sales Tax Act 1956 and ||2012-13 ||18.55 ||Additional Commissioner |
|VAT and Entry Tax ||Sales Tax Acts of various states ||2013-15 ||4.40 ||Joint Commissioner |
| || ||1996-97 2002-03 & 2013-14 ||18.68 ||Deputy Commissioner |
|Total || || ||1318.33 || |
(*) Net of amount deposited under protest
viii. Based on our audit procedures and according to the informationand explanations given by the management we are of the opinion that as on March 31 2020the Company has defaulted in repayment of dues to lenders aggregating to Rs. 278014.67lakhs. Lender wise details of such default is as under:
(Rs. In lakhs)
|Name of Bank / Others ||Total Default ||Below 90 Days ||Above 90 Days |
|ACRE 54 Trust (State Bank of India) ||95531.58 ||8196.60 ||87334.98 |
|ACRE 64 Trust (Punjab National Bank) ||64855.39 ||5483.89 ||59371.50 |
|ACRE 59 Trust (Union Bank of India) ||33886.61 ||3097.41 ||30789.20 |
|ACRE 70 Trust (Oriental Bank of Commerce) ||11634.47 ||1027.39 ||10607.08 |
|ACRE 76 Trust (Bank of India) ||6972.43 ||625.15 ||6347.28 |
|ACRE 63 Trust (Indian Overseas Bank) ||11601.58 ||915.09 ||10686.49 |
|ACRE 69 Trust (Central Bank of India) ||20468.62 ||1723.74 ||18744.88 |
|ACRE 68 Trust (IDBI Bank) ||19138.18 ||1248.92 ||17889.26 |
|Bank of Maharashtra ||8271.18 ||702.79 ||7568.39 |
|Andhra Bank ||3431.12 ||298.50 ||3132.62 |
|UCO Bank ||2223.51 ||84.51 ||2139.00 |
|Total ||278014.67 ||23403.99 ||254610.68 |
According to the information and explanations given to us thefollowing banks have classified the credit facilities given to the Company as NonPerforming Asset (NPA) as on March 31 2020 in their Books of Account.
(Rs. in lakhs)
|Bank ||Term Loan Principal ||Fund Based Working Capital ||Total |
|1. Bank of Maharashtra ||9258.78 ||- ||9258.78 |
|2. Andhra Bank ||4815.61 ||- ||4815.61 |
|3. UCO Bank ||1434.19 ||- ||1434.19 |
|4. ICICI Bank ||- ||5474.43 ||5474.43 |
|Total ||15508.58 ||5474.43 ||20983.01 |
ix. According to the information and explanations given to us duringthe year the Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments). The term loans raised by the Company haveprima facie been applied for the purpose for which they are raised.
x. Based on our audit procedures performed for the purpose of reportingthe true and fair view of the Financial Statements and on the basis of information andexplanations given by the management no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
xi. In our opinion according to the information and explanations givento us and based on our examination of records the Company has paid or provided managerialremuneration in accordance with the provisions of requisite approvals mandated by theprovision of section 197 read with Schedule V to the Act except remuneration paid tothree of the whole time directors amounting to Rs. 131.57 Lakhs which is subject to theshareholder's approval.
xii. In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Therefore the provisions of clause (xii)of paragraph 3 of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the Financial Statements as requiredby the applicable Indian accounting standards.
xiv. According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or debentures during the year.Therefore the provisions of clause (xiv) of paragraph 3 of the order are not applicableto the Company.
xv. According to the information and explanations given to us duringthe year the Company has not entered into non-cash transactions with directors or personsconnected with him. Therefore the provisions of clause (xv) of paragraph 3 of the Orderare not applicable to the Company.
xvi. In our opinion and according to information and explanationsprovided to us the Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.
|For Pathak H. D. & Associates LLP ||For Naresh Patadia & Co. |
|Chartered Accountants ||Chartered Accountants |
|Firm Reg. No. 107783W/W100593 ||Firm Reg. No. 106936W |
|Mukesh Mehta ||Naresh Patadia |
|Partner ||Proprietor |
|Membership No. 43495 ||Membership No. 35620 |
|UDIN: 20043495AAAACE1388 ||UDIN: 20035620AAAAAD9864 |
|Mumbai ||Nagpur |
|Date: June 29 2020 ||Date: June 29 2020 |