To the Members of Kalyanpur Cements Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Kalyanpur CementsLimited (the Company") which compose the Balance Sheet as at March 312017 the Statement of Profit and Loss and Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information
Management's Responsibility for the Financial Statements
2. The management and Board of Directors of the Company are responsible for the mattersstated in Section 134(5) of the Companies Act 2013 (the Act') with respect to thepreparation of these 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 Companies (Accounts) Rules2014. This responsibility includes maintenance of adequate accounting records Inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent: design implementation and maintenance of adequate eternal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
3 Our responsibility is to express an opinion on these financial statements based onour audit. Wo have taken into account the provisions of the Act. the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made there under We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable- assurance about whether the financial statements are free frommaterial misstatement
4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures In the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view. In order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate Internal financial controls systemover financial reporting and the operating effectiveness of such controls An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimate s made by the Company's management and Board of Directors aswell as evaluating the overall presentation of the financial statements
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion
6. In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give th8 information required by the Act in themanner so required and give a true and fan view in conformity with the accountingprinciples generally accepted in India'
(a) in the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2017;
(b) In the case of the Statement of Profit and Loss of the loss for the year ended onthat date: and
(c) In the case of the Cash Flow Statement of the cash flows of the Company for theyear ended on that date.
Emphasis on Manors
We draw attention to the following matters in the Notes to the financial statements:
(i) As stated in para 1.1 of Note 19 to the Balance Sheet the claim of BSEB (now SouthBihar Power Distribution Company United) is disputed in respect of 33 KV power connection.The nature of dispute & the details relating thereto have been explained in the aboveparagraph of Note 19.
(ii) In terms of para 4 of Note 19 to the Balance Sheet. Documents and papers relatingto all the immovable properties including land at Banjan are deposited with IFCI Ltd.Which assigned its loan earlier granted to the Company to Arcil - Kalyanpur Cements Ltd.Trust.
(iii) Without Qualifying our opinion though the accounts have been drawn on goingconcern concept the accumulated losses at the end of current financial year consideringthe loss of Rs. 14534.00 Lacs for the year amount to Rs 57094.16 Lacs (Refer Note no. 2 inFinancial Statement) against the capital and reserve of Rs.4836.54 Lacs which leaves anegative net worth of Rs.52257.62 Lacs In view of this negative networth. ability of theCompany to continue as a going concern is dependent upon tho Company's performance interms of the Resolution Plan to be approved by the Hon'ble National Company Law Tribunal(NCLT) under the provisions of Insolvency and Bankruptcy Code. 2016. The Hon'ble NCLT hasordered commencement of the corporate insolvency resolution process in respect of theCompany and appointed an Interim Resolution Professional (IRP).
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor's Report) Order 2016 (the Order") issuedby the Central Government of India in terms of sub-section (11) of soction143 of the Actwe give in the "Anmexure-1" a statement on the matters Specified in paragraphs 3and 4 of the Order.
As required by section 143(3) of the Act we further 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 the aforesaid financial statements comply with the applicableAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) The going concern matter described in sub-paragraph (III) 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 terms of Section 164(2) of theAct.
S) With respect to the adequacy of the financial controls over financial reporting ofthe Company and the operating effectiveness of such controls refer to our separate Reportin "Annexuro-II" and
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 pending litigations which impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foresooab'o losses thereon does not arise.
iii. There has not been an occasion in case of the Company during the year under reportto transfer any sums to the Investor Education and Protection Fund.
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November.2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management - Refer Note [Note no.19 sub clause 13 001
For M Mukerjee & Company
Firm Registration No303013E
Membership No 135833
Date : 30.05.2017
ANNEXURE-I TO INDEPENDENT AUDITORS' REPORT - 31 MARCH 2017
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that.
(i) According to the information and as explained to us :
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) As explained to us. fixed assets have been physically verified by the management atregular intervals; In our opirvon this periodicity of physical verification is reasonablehaving regard to the size of the company and the nature of its assets. As informed to usno material discrepancies were noticed on such verification.
c) In our opinion and according to Information and explanations given to us and on thebasis of an examination of the records of the Company the title deeds of the immovableproperties are held in the name of the Company
(ii) The Inventory has been physically verified during the period by the management Thediscrepancies noted on verification between the physical stock and the books were notmaterial and have been properly dealt with in the books of account.
(Hi) The company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act.
(hr) In our opinion and according to the information and explanations given to us. theCompany has not granted any loan made any investment or provideo any guarantee orsecurity to any party.
(v) The Company has not accepted any deposits from the public covered under Sections 73to 76 of the Companies Act 2013
(vi) We have broadly reviewed the cost records maintained by the Company as prescribedby the Central Government under Sub Section (1) of Section 148 of the Companies Act. 2013and are of the opinion that prima facie the prescribed cost records have been maintained.We have however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete
(vii) a) According to the informs bon and explanations given to us and on the basis ofexamination of records of the Company the company is not regular in depositing theundisputed statutory dues including Provident Fund. Income-tax(TDS). Service Tax. ValueAdded Tax. Royalty & Cess to the appropriate authorities The extent of outstandingstatutory dues as on 31.3.2017 for a period of more than six months from the date theybecame payable are given below:-
|SI. No. ||Statutory Dues ||Outstanding Dues (R6. In Lacs) |
|1 ||Royalty Dues ||1628.73 |
|2 ||VAT Dues ||4529.92 |
|3 ||PF & EPS Dues ||1920.02 |
|4 ||TDS Dues ||393.73 |
|5 ||Cement CESS ||15.45 |
|6 ||Central Excise Duty ||0.00 |
|7 ||Service Tax ||8.86 |
b) According to information and as explained to us. there has been no instance whereinIncome Tax or Sales Tax or Wealth Tax or Service Tax or duty of Custom or duty of Exciseor Value Added Tax or Cess have not been deposited on account of dispute
(viii) The company has defaulted In payment of the Central Excise loan of theGovernment of India disbursed through IFCI Ltd. as refe'red to in Note 4 to the BalanceSheet.
(ix) The company has not raised any money by way of initial public offer or furtherpublic offer or debt instrument. The funds raised through short term loans have beenapplied for the purpose for which the same were raised
(x) According to the information and explanations given to us. no fraud by the Companyor any fraud on the Company by its officers or employees has been noticed or reportedduring the course of our audit.
(xi) According to the information and explanations given to us. managerial remunerationhas been paid or provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Ad Reference is invited to note20.10 to the Profit & Loss Statement for the year under report.
(xii) According to the information and explanations given to us. the Company is not aNidhi Company.
(xiii) According to the information and explanations given to us all transactions withthe related parties are in compliance with Sections 177 and 188 of the Act. whereapplicable and the details have been disclosed in the Financial Statements as required bythe applicable accounting standards.
(xiv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partially convertible debenturesduring the year
(xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered Into non- cashtransactions with the Directors or persons connected with him.
(xvi) According to the information and explanation given to us. the Company is notrequired to bo registered under Section 45 lA of the Reserve Bank of India Act 1934.
For M Mukerjee & Company
Firm Registration No303013E
Membership No. 135833
Place : Patna
Date : 30-05-2017
(Referred to in our report of ever date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act
We have audited the internal financial controls over financial reporting of KalyanpurCements Limited ("the Company") as at 31st March 2017 in conjunction with ouraudit of the 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 ("TCAI") Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols ever 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 deemed tobe prescribed under Section 143 (10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and If such controls operated effectively in all materialrespects
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.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
The 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
a) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company:
b) Provide reasonable assurance that transactions are recorded as neccssary 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 authorizations of management and Directors of the Company; and
c) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use. or disposition of the company's assets that could have amaterial effect on the financial statements
Inherent Limitations of Internal Financial Control* Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting include the possibility of colliusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected. Alsoprojection* of any evaluation of the internal financial control* over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate
In our opinion the Company has. In ail material respects an adequate Internalfinancial control* system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017. 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.
| ||For M Mukerjee & Company |
| ||Chartered Accountants |
| ||Firm Registration No303013E |
| ||Spandan Sengupta |
|Place : Patna ||Partner |
|Date: 30-05-2017 ||Membership No 135833 |