To the members of jbf industries limited
Report on the audit of the standalone financial statements
We have audited the accompanying standalone financial statements of jbfindustries limited ("the company) which comprise the balance sheet as at 31stmarch 2020 the statement of profit and loss (including other comprehensive income) thestatement of changes in equity and the statement of cash flows for the year then endedand notes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us excepts for the effects of the matters described in the basisfor qualified opinion section of our report the aforesaid standalone financial statementsgive a true and fair view in conformity with the accounting principles generally acceptedin india of the state of affairs of the company as at 31st march 2020 and its lossincluding other comprehensive income the statement of changes in equity and its cashflows for the year ended on that date.
Basis for qualified opinion
(i) as mentioned in the note 33.1 to the standalone financialstatements provision of interest @ 9% p.a. On its borrowings aggregating to Rs 2618.65crore for the year ended from 1st april 2019 to 31st march 2020 as against the documentedrate resulting into lower provision of finance cost for the year ended 31st march 2020 byRs 139.86 crore which is not in compliance with ind as -23 "borrowings costs"read with ind as-109 on financial instruments".
Had the interest been recognized at the documented rate finance costnet loss after tax total comprehensive income and eps for the year ended would have beenRs 388.37 crore rs (473.36) crore rs (474.54) crore and rs (57.82) respectively asagainst the reported figure of Rs 248.51 crore rs (333.50) crore rs (334.68) crore andrs (40.73) respectively in the above standalone financial statements. Further currentfinancial liabilities-others and other equity as at 31st march 2020 would have been Rs1483.93 crore and Rs 54.57 crore respectively as against reported figure of Rs1240.91crore and Rs 297.59 crore respectively in the above standalone financialstatements.
(ii) as mentioned in the note 45 to the standalone financialstatements company has exposure in subsidiaries by way of investments loans and otherreceivables aggregating to Rs 1515.69 crore (as at 31st march 2019 Rs 1508.24 crore)in respect of which the company could not carry out impairment assessments due to thereasons mentioned therein. We are unable to obtain sufficient appropriate audit evidenceabout the recoverable amount of the company's exposure. Consequently we are unable toquantify the provisions for impairments in respect of the above and its consequentialimpacts on the standalone financial statements of the company.
(iii) as mentioned in note 17.3 to the standalone financial statementsother current assets as at 31st march 2020 includes Rs 6.90 crore given to one of thesuppliers of the company as advance against supply of goods which are unsettled for theextended period of time have been considered good for recovery by the management for thereasons stated therein. In view of the age of these balances the absence of subsequentsettlements and non-receipt of balance confirmation we are unable to comment on therecoverability of above advance and its consequential impacts on the standalone financialstatements of the company.
(iv) as mentioned in note 37.3 to the standalone financial statementsregarding the application filed with national company law tribunal (nclt) by the one ofthe operational creditors of jbf rak llc (jbf rak) situated at uae a subsidiary of thecompany against the company for supply of raw materials to jbf rak and claim of Rs128.48 crore (us$ 19899091.53). No provision has been considered for the above claim forthe reasons stated therein. The matter described in above has uncertainties related to theoutcome of the legal proceedings and hence we are unable to quantify the provisions forabove claim at this stage if any and its consequential impacts on the standalonefinancial statements of the company.
We conducted our audit of the standalone financial statements inaccordance with the standards on auditing (sas) as specified under section 143(10) of thecompanies act 2013 (the act"). Our responsibilities under those standards arefurther described in the auditor's responsibilities for the audit of the standalonefinancial statements section of our report. We are independent of the company inaccordance with the code of ethics issued by the institute of chartered accountants ofindia (icai) together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the act and the rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the icai's code of ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.
Material uncertainty related to going concern
Note 46 to the standalone financial statements regarding preparationof financial statements on going concern basis notwithstanding the fact that the companyhas incurred the losses defaulted in repayment of principle and interest to its lenderslenders have classified the company's borrowings as npa declared as wilful defaulteralso some of the lenders have even called back the loans one of the secured lenders hasapplied before nclt under insolvency and bankruptcy code 2016. These conditions alongwith other matters as set forth in above note indicate the existence of materialuncertainty that may cast significant doubt about company's ability to continue as a goingconcern. The appropriateness of assumption of going concern is critically dependent uponthe company's ability to raise finance and generate cash flows in future to meet it'sobligations. Our opinion is not modified in respect of this matter.
Emphasis of matters
We draw your attention to the:-
(i) note 37.2 to the standalone financial statements regardinginvocation of corporate guarantee given by the company to the lenders of jbf petrochemicallimited ("jpl). The company has denied above invocation and is of the view thatabove invocation is not legally tenable for the reasons explained therein and hence noprovision against the claims under the invoked corporate guarantee is considerednecessary.
(ii) note 50 to the standalone financial statements regarding non-preparation of consolidated financial statements due to the reasons mentioned therein. Thecompany has six subsidiaries and is required to present consolidated financial statements.However the company has not prepared and presented the consolidated financial statementsrequired by companies act 2013 and ind as 110 "consolidated financialstatements".
(iii) note 53 to the standalone financial statements regarding thebalance confirmations of trade receivables and payables. During the course of preparationof standalone financial statements emails have been sent to various parties with arequest to confirm their balances directly to us out of which only some parties haveresponded and accordingly the balances of those parties for which confirmations have notbeen received are subject to confirmation.the management does not expect any significantimpact on account of it.
(iv) note 54 to the standalone financial statements regarding vacancyof the post of chief executive officer and chief financial officer since 1st may 2019 and2nd march 2020 respectively due to the reason as mention therein.
(v) note 52 to the standalone financial statements as regards to themanagement evaluation of covid -19 impact on the future performance of the company.However in future the impact may be different from those estimated as on the date ofapproval of these financial statements.
(vi) note 32.2 to the standalone financial statements regardingmanagerial remuneration of rs 0.47 crore paid to whole time directors is subject toapprovals of shareholders.
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 standalone financial statements of thecurrent year. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. In addition to the matter described in the basis forqualified opinion material uncertainty related to going concern & emphasis of matterssection we have determined the matters described below to be key audit matters to becommunicated in our report.
|Key audit matters ||How our audit addressed the key audit matter |
|(i) carrying value of trade receivables || |
|As mentioned in note no. 11 to the standalone financial statements total trade receivable were aggregating to Rs 836.63 crore as on 31st march 2020 out of above 554.67 crore were provided. ||Our audit procedures included the following: |
|The collectability of the company's trade receivables and the valuation of allowance for impairment of trade receivables is required a significant management judgment. Management considers specific factors including the age of the balance location of customers existence of disputes recent historical payment patterns and any other available information concerning the creditworthiness of counterparties. Management uses this information to determine whether a provision for impairment is required either for a specific transaction or for a customer's balance overall. || we selected a sample of the larger trade receivable balances where a provision for impairment of trade receivables was recognized and understood the rationale behind management's judgment. |
| || |
| || assessing the ageing of trade receivables the customer's historical payment patterns and whether any post year-end payments had been received up to the date of completing our audit procedures. |
| || reviewing the available evidence including correspondences if any legal notices related to disputes where applicable. |
|Accordingly it has been determined as a key audit matter. || assessing the company's provisioning policy and evaluating with reference to applicable accounting standards. |
| || |
| || considered the completeness and accuracy of the disclosures. |
|(ii) impairment of property plant & equipment || |
|As at 31st march 2020 value of property plant and equipment is Rs 1261.07 crore. Management's assessment of the valuation of property plant and equipment was significant to our audit because this process is complex and requires significant management judgment. Furthermore there is an increased risk of impairment due to the recently deteriorated market outlook and losses incurred by the company. ||We carried out procedures to understand management's process for identifying impairment triggers and considered management's assessment of impairment in the above mentioned areas. Our audit procedures included the following: |
|Determining the recoverable amounts of the assets requires a number of significant judgments and estimates especially in the assumptions used in the valuation report. || evaluating the appropriateness of the company's judgment regarding identification of assets which may be impaired. |
|Accordingly it has been determined as a key audit matter. || assessing the appropriateness of the methodology used by the external valuer in determining the recoverable amount including key assumptions used |
| || checking on a sample basis the accuracy and relevance of the input data provided by management to the external valuer |
| || considered the completeness and accuracy of the disclosures which are included in note 5 of the standalone financial statements. |
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 standalonefinancial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to communicate the matterto those charged with governance. We have nothing to report in this regard.
Responsibilities of management and those charged with governance forthe standalone financial statements
The company's board of directors is responsible for the matters statedin section 134(5) of the act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the company inaccordance with the accounting principles generally accepted in india including theindian accounting standards (ind as) specified under section 133 of the act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the act for safeguarding of the assets of the company and for preventingand detecting frauds and other irregularities; selection and application of appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the company or to ceaseoperations or has no realistic alternative but to do so.
Those board of directors are also responsible for overseeing thecompany's financial reporting process.
Auditor's responsibilities for the audit of the standalone financialstatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with sas will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate
They could reasonably be expected to influence the economic decisionsof users taken On the basis of these standalone 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 thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3) (i) of the act we are also responsible for expressingour opinion on whether the company has adequate internal financial controls system inplace and the operating 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 standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the company to cease to continue as a going concern.
evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 standalonefinancial statements of the current year and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 companies act 2013 we give in the "annexure b astatement on the matters specified in paragraphs 3 and 4 of the order to the extentapplicable.
2 as required by section 143(3) of the act we report that:
(a) except for the effects of matters described in the basis forqualified opinion paragraph above we have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit.
(b) except for the effects of matters described in the basis forqualified opinion paragraph above in our opinion proper books of account as required bylaw have been kept by the company so far as it appears from our examination of thosebooks.
(c) the balance sheet the statement of profit and loss (includingother comprehensive income) the statement of change in equity and the cash flow statementdealt with by this report are in agreement with the books of account.
(d) except for the effects of matters described in the basis forqualified opinion paragraph above in our opinion the aforesaid standalone financialstatements comply with the indian accounting standards specified under section 133 of theact read with companies (indian accounting standards) rules 2015 as amended.
(e) the matters described in paragraph "basis for qualifiedopinion" and "material uncertainty related to going concern may have anadverse effect on the functioning of the company.
(f) on the basis of the written representations received from thedirectors as on 31st march 2020 taken on record by the board of directors none of thedirectors is disqualified as on 31st march 2020 from being appointed as a director interms of section 164(2) of the act.
(g) with respect to the adequacy of the internal financial controlsover financial reporting of the company and the operating effectiveness of such controlsrefer to our separate report in "annexure a to this report.
(h) with respect to the other matters to be included in the auditor'sreport in accordance with the requirements of section 197(16) of the act as amended: inour opinion and to the best of our information and according to the explanations given tous the remuneration paid or provided by the company to its directors during the year isin accordance with the provisions of section 197 of the act except remuneration paid totwo of the whole time directors amounting to rs 0.47 crore which is subject to theshareholder's approval.
(i) 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 as at31st march 2020 on its financial position in its standalone financial statements asreferred in note 37 to the standalone financial statements.
Ii. Except for the effects of matters described in the basis forqualified opinion paragraph above the company has made provision as required under theapplicable law or accounting standards for material foreseeable losses if any onlong-term contracts including derivative contracts.
Iii. There has been no delay in transferring amounts required to betransferred to the investor education and protection fund by the company during the yearended 31st march 2020.
| ||For pathak h.d & associates llp |
| ||Chartered accountants |
| ||Firm's registration no.107783w/w100593 |
|Place: mumbai ||Gopal chaturvedi |
|Date:10.09.2020 ||Partner |
| ||Membership no. 090903 |
| ||Udin:-20090903aaaadk4682 |
Annexure - "a" to the independent auditors' report
(referred to in paragraph 2 (g) under 'report on other legal andregulatory requirements' of our report of even date on the standalone financial statementsof jbf industries limited for the year ended 31st march 2020) report on the internalfinancial controls over financial reporting under clause (i) of sub-section 3 of section143 of the companies act 2013 ("the act")
We have audited the internal financial controls over financialreporting of jbf industries limited ("the company) as of 31st march2020 in conjunction with our audit of the standalone financial statements of the companyfor 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 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. 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 of fraudsand 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's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the guidance note and the standards on auditing prescribed under section143(10) of the companies act 2013 to the extent applicable to an audit of internalfinancial controls. 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 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls 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 judgement including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified 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 is aprocess 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 financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations
Of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
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 controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
According to the information and explanations given to us and based onour audit the following material weakness has been identified in the operatingeffectiveness of the company's internal financial control over financial reporting as on31st march 2020 the company did not have an appropriate internal control system forcustomer settlement through credit note credit evaluation pricing authorizationestablishing customer credit limits and some of the export transactions without anyadvances/ letter of credits which may result in the company recognizing revenue withoutestablishing reasonable certainty of ultimate collection.
The company has exposures of Rs 1515.69 crore as at 31st march 2020 inits subsidiaries by way of investment in equity shares loans including interest thereonand other receivables. The company does not have any adequate mis system from them andconsolidated financial statements of that subsidiary is also not available and in theabsence thereof the company could not carried out impairment testing as referred inparagraph (ii) of basis for qualified opinion in the report on the audit of the standalonefinancial statements.
The company also does not have chief executive officer and chieffinancial officer since 1st may 2019 and 2nd march 2020 respectively as referred inparagraph (iv) of emphasis of matters in the report on the audit of the standalonefinancial statements. A material weakness is a deficiency or a combination ofdeficiencies in internal financial control over financial reporting such that there is areasonable possibility that a material misstatement of the company's annual financialstatements will not be prevented or detected on a timely basis.
In our opinion except for the effects/possible effects of abovematerial weakness described above on the achievement of the objectives of the controlcriteria the company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st march 2020 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the guidance note.
We have considered the material weakness identified and reported abovein determining the nature timing and extent of audit tests applied in our audit ofstandalone financial statements of the company for the year ended 31st march 2020 andthese material weakness do not affect our opinion on the standalone financial statementsof the company.
| ||For pathak h.d. & associates llp |
| ||Chartered accountants |
| ||Firm reg. No. 107783w/w100593 |
| ||Gopal chaturvedi |
|Place: mumbai ||Partner |
|Dated: 10.09.2020 ||Membership no.:-090903 |
|Udin:- 20090903aaaadk4682 |
Annexure - "b" to independent auditors' report
(referred to in paragraph 1 under the heading "report on otherlegal and regulatory requirements" of our report of even date on the standalonefinancial statements to the members of jbf industries limited for the year ended 31stmarch 2020)
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 fixed assets have been physically verifiedby the management in accordance with the programme of verification which in our opinionis reasonable considering the size of the company and nature of its assets. No materialdiscrepancies were noticed on such physical verification as compared with the availablerecords.
C. According to the information and explanations given to us and basedon the examination of the registered sale deeds and other relevant records evidencingtitle provided to us we report that the title deeds comprising all the immovableproperties of land and buildings which are freehold are held in the name of the companyas at the balance sheet date except the following:-
|Particulars of land and building ||Cost of the property as at 31st march 2020 (Rs in crore) ||Net block as at 31st march 2020 (Rs in crore) |
|Building in mumbai ( no. of property1) ||0.09 ||0.07 |
|Land at silvassa (no. of properties7) ||0.54 ||0.54 |
In respect of 9 immovable properties having the aggregate cost of Rs39.62 crore the original documents have been deposited with the lenders we have beenproduced photocopy of documents for those immovable properties and based on suchdocuments the title deeds are held in the name of the company.
In respect of immovable properties of land and buildings that have beentaken on lease and disclosed as fixed asset in the financial statements the leaseagreements are in the name of the company.
Ii. As explained to us inventories have been physically verifiedduring the year by the management except material in transit and in our opinion thefrequency of verification is reasonable. The year-end verification could not be carriedout due to lock- down amidst covid 19 pandemic. The inventories as on that date have beenarrived at by rolling back the receipts and issues with respect to verification carriedout on a subsequent date by the management. Discrepancies noticed on physical verificationof the inventories between the physical inventories and book records were not materialhaving regard to the size of the operations of the company and the same have been properlydealt 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. According to the information andexplanation given to us:
A. The company has granted unsecured loans to two such companies and inour opinion the rate of interest as applicable and other terms and conditions on whichthe loans had been granted were not prima facie prejudicial to the interest of thecompany.
B. The schedule of repayment of principal and payment of interest werestipulated at the time of granting of loan. The company discontinued to recognize theinterest on loan to one of the subsidiary companies w. E. F. 1st april 2018. Therepayments of principal amounts and payment of interest were overdue as on the balancesheet date.
C. Principal amount of Rs 772.30 crore and interest thereon of Rs110.68 crore are overdue from one of the subsidiary companies for more than 90 days. Asper the information and explanation given to us no steps have been taken by the companyto recover of principal and interest (refer note 45 to the standalone financialstatements).
Iv. In our opinion and according to the information and explanationsgiven to us the company has complied with the provisions of sections 185 & 186 of theact as applicable in respect of grant of loan sexcept discontinuance of interestrecognition on the loans granted to one of the subsidiary companies. During the yearcompany has not made any investments not provided any security or given any guarantee.
V. According to the information and explanations given to us thecompany has not accepted any deposit 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 companies ( cost records & audit ) rules 2014 prescribed by centralgovernment under section 148 (1) (d) of the act as applicable and are of the opinion thatprima-facie the prescribed accounts and records have been made and maintained. We havenot however made a detailed examination of the records with a view to determine whetherthey are accurate and complete
Vii. According to the information and explanations given to us inrespect of statutory dues:
A. The company has been generally regular in depositing undisputedstatutory dues including provident fund employees' state insurance income tax goodsand services tax duty of customs cess and any other statutory dues with the appropriateauthorities as applicable during the year except some cases of custom duty & goods andservices tax. According to the information and explanations given to us no undisputedamounts payable in respect of such statutory dues were outstanding as at 31st march 2020for a period of more than six months from the date they became payable
B. According to the information and explanations given to us thedisputed statutory dues aggregating to Rs 1.76 crore that have not been deposited onaccount of matters pending before appropriate authorities are as under:
|Name of the statute ||Nature of the dues ||In crore ||Period to which the amount relates ||Forum where dispute is pending |
|Central excise act1944 ||Excise duty ||0.64 ||2005-06 ||Supreme court |
|1.12 ||2005-06 ||Custom excise & service tax appellate tribunal |
|Total || ||1.76 || || |
Viii. Based on our audit procedures and according to the informationand explanations given by the management we are of the opinion that the company hasdefaulted in repayment of dues to banks and financial institutions aggregating to Rs3194.90 crore. Lender wise details of such default is as under:-
(Rs in crore)
|Bank/financial institution ||Total default ||Below 90 days ||Above 90 days |
|1 Acre-100-trust (ecl finance limited) ||163.51 ||4.70 ||158.81 |
|2 Andhra bank ||164.37 ||3.61 ||160.76 |
|3 Axis bank ltd. ||79.70 ||1.91 ||77.79 |
|4 Bank of baroda ||536.25 ||13.06 ||523.19 |
|5 Bank of india ||424.55 ||8.72 ||415.83 |
|6 Canara bank ||288.25 ||4.19 ||284.06 |
|7 Icici bank.15 ||146.79 ||0.66 ||146.13 |
|8 Idbi bank ||249.34 ||7.22 ||242.12 |
|9 Ifci limited ||66.72 ||2.06 ||64.66 |
|10 Indian overseas bank ||103.63 ||3.07 ||100.56 |
|11 Lakshmi vilas bank ||92.68 ||2.26 ||90.42 |
|12 South indian bank ||38.63 ||1.34 ||37.29 |
|13 Standard chartered bank ||133.80 ||3.51 ||130.29 |
|14 State bank of india ||458.99 ||17.37 ||441.62 |
|15 Syndicate bank ||68.20 ||2.25 ||65.95 |
|16 Tamilnad mercantile bank ||27.21 ||0.88 ||26.33 |
|17 Union bank of india ||152.28 ||4.42 ||147.86 |
|Total ||3194.90 ||81.23 ||3113.67 |
Further lenders of the company have classified all the creditfacilities given to the
Company as at 31st march 2020 as non-performing asset (npa) in theirbooks of
Ix. According to the information and explanations given to us thecompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and no term loan was raised and therefore the provisions ofclause (ix) of paragraph 3 of the order are not applicable to the company.
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 and according to the information and explanationsgive to us and based on our examination of the records the company has paid/ providedmanagerial remuneration (net of recovery) in accordance with the requisite approvalsmandated by the provisions of section 197 read with schedule v to the act exceptremuneration paid to two of the whole time directors amounting to rs 0.47 crore which issubject to the shareholder'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)paragraph 3 of the order are not applicable to the company.
Xiii. In our opinion and according to the information and explanationsgiven to us and based on our examination of the records of the company company'stransactions with the related parties are in compliance with sections 177 and 188 of theact as applicable and details of such transactions have been disclosed in the standalonefinancial statements as required by the applicable indian accounting standards.
Xiv. According to the information and explanations give to us and basedon our examination of the records of the company the company has not made preferentialallotment of shares during the year under audit.
Xv. According to the information and explanations given to us and basedon our examination of the records of the company the company has not entered intonon-cash transactions with directors or persons connected with him. Therefore theprovisions of clause (xv) paragraph 3 of the order are 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 |
| ||Chartered accountants |
| ||Firm reg. No. 107783w/w100593 |
| ||Gopal chaturvedi |
|Place: mumbai ||Partner |
|Dated: 10.09.2020 ||Membership no.:-090903 |
|Udin:- 20090903aaaadk4682 |