To the Members of
Vardhman Concrete Limited
Report on the audit of the Standalone Ind AS Financial Statements
We have audited the Standalone Ind AS financial statements of Vardhman ConcreteLimited ("the Company") which comprise the Balance Sheet as at March 312019 and the Statement of Profit and Loss the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and notes to the Standalone Ind ASfinancial statements including a summary of significant accounting policies and otherexplanatory information for the year ended on that date.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its loss changes in equity andits cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Ind AS Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the Standalone Ind AS financial statements under the provision of the Companies Act2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Material Uncertainty Related to Going Concern:
Without qualifying we draw attention to note no. 25 of the attached financialstatement regarding the financial statements of the Company having been prepared on agoing concern basis which contemplates the realization of assets and satisfaction ofliabilities in the normal course of business. The Company has been continuously incurringlosses since last several years and its networth stands substantially eroded. Theseconditions indicate the existence of uncertainty that may cast doubt about the Company'sability to continue as a going concern. However as explained by the Management theCompany has large order in hand hence its ability to continue inter-alia is dependent onthe generation of cash flow profits from their execution and on the Company's ability toinfuse requisite funds for meeting its obligations.
Emphasis of Matter : a. Overdue Trade Receivables of Rs. 362.80 Lakhs and Advances& deposits (included in other current assets) of Rs. 222.96 lakhs are in our opinionis doubtful of recovery and should be provided for. However as explained by theManagement that the Company is making concerted efforts to recover the same and confidentof recovery in due course. Hence no provision is considered necessary at present.
Further aforesaid balances are subject to confirmation/reconciliations and consequentadjustments if any. As explained by the Management that there would not be any impact onloss for the quarter and year ended March 31 2019 after such reconciliation. (Refer noteno. 27 & 28) b. There are certain legal disputes and claims which are underarbitration proceedings before judiciary authorities. The outcome of these proceedingsagainst the Company may have significant impact on the loss for the quarter and net-worthof the Company as on March 31 2019 the amount whereof is not presently ascertainable.However contingent liability for the same is given under Note No 23.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon. There are no other key auditmatters and we do not provide a separate opinion on these matters.
Responsibility of Management and Those Charged with Governance for the Standalone IndAS Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ('the Act") with respect to the preparationof these Standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but it is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgement andmaintain 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 control relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether 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 going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability 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 the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition except as stated otherwise.
ii. The Company does not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise.
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. The question of delayin transferring such sums does not arise.
For AMAR BAFNA& ASSOCIATES
Firm Registration No: 114854W
Membership No: 048639
Annexure "A" to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of the companyon the standalone financial statements for the year ended 31st March 2019 we report that:
i. (a) The Company is in the process of updating records showing full particularsincluding quantities details and situation of Fixed Assets.
(b) As explained to us by the management the some of the assets have been physicallyverified at the end of the period at various sites by the site-in charge and no majordiscrepancies were noticed to the extent available records. The frequency of verificationneeds to be strengthened considering the size and the nature of the business of theCompany.
(c) According to the information and explanations given to us and on the basis ofexamination of the records of the company the title deed of immovable properties are heldin the name of the Company.
ii. The company does not have any inventories hence this clause is not applicable.
iii. In our opinion and according to the information and explanations given to us theCompany has not given loan to any party covered in the register maintained under section189 of the Companies Act.
iv. In our opinion and according to the information and explanations given to us thecompany has not given any loans guarantees and made any investments to which provision ofSection 185 and 186 of the Companies Act applies.
v. According to the information and explanations given to us the Company has notaccepted deposits as referred to in the directives issued by the Reserve Bank of India andthe provisions of the section 73 to 76 or any other relevant provisions of the CompaniesAct and the rules framed there under.
vi. As per the information and explanations given to us the Central Government has notprescribed the maintenance of Cost Records under section 148 of the Companies Act inrespect of any products of the Company.
vii. (a) In our opinion and according to the explanation and information given to usthe Company has been generally regular in depositing with appropriate authorities'undisputed statutory dues including Provident Fund Tax Deducted at Source Service TaxGST and other statutory dues wherever applicable. The details of undisputed statutory dues(excluding interest) outstanding for a period of more than six months from the date theybecame payable are as under:
|Name of the statute || |
Period to which the Amount Relates
Amount (in Rs)
|a) Maharashtra Value Added Tax || |
|b) Service Tax || |
|c) Service Tax || |
|TOTAL || || |
In addition to above there are demands raised from Central Processing Centre (CPC) TDSaggregating to Rs. 61720/- for various financial years. As informed to us the company isin the process of identifying the nature of such demands and whether anyrectification/disputes are required to be taken before jurisdictional authorities.
(b) According to the information and explanation given to us there are no amount ofdisputed statutory dues which has not been deposited with the concern authority except thefollowing:-
|Name of the statute ||Period to which the Amount Relates ||Name of Forum where case is pending || |
Amount (in Rs)
|a) Maharashtra Value Added Tax ||FY 2010-11 ||Sales Tax (Ass. Dues) Mumbai || |
viii. In our opinion and according to the information and explanations given to us thecompany has neither obtained any loan from financial institution and bank nor issued anydebenture. Accordingly paragraph 3(viii) of the order is not applicable.
ix. In our opinion and according to the information and explanations given to us thecompany has not raised any money by the way of public issue/ follow-on offer (includingdebt instrument) and term loan. . Accordingly paragraph 3(ix) of the order is notapplicable.
x. In our opinion and according to information and explanations given to us we havenot found any fraud by the company or any fraud on the company by its officer/ employees.
xi. In our opinion and according to the information and explanations given to us thecompany has not paid/provided any managerial remuneration during the year.
xii. Company is not the Nidhi Company so provision requiring to maintain ratio of netown fund to liability does not apply. Accordingly paragraph 3(xii) of the order is notapplicable.
xiii. In our opinion and according to the information and explanations given to us allthe transaction with related party are in compliance with Section 188 and 177 of CompaniesAct 2013. Relevant details have been disclosed in note no 22 to accounts as perdisclosure requirements of accounting standards and Companies Act 2013.
xiv. In our opinion and according to the information and explanations given to us thecompany has not made any preferential allotment / private placement of shares or fully orpartly convertible debentures during the year under review.
xv. In our opinion and according to the information and explanations given to us thecompany has not entered into any non-cash transactions with directors or any personconnected with him. . Accordingly paragraph 3(xv) of the order is not applicable.
xvi. The company is not NBFC according to section 45-IA of the RBI Act 1934 so it doesnot need to obtain registration under the said Act.
| ||For AMAR BAFNA& ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||Firm Registration No: 114854W |
| ||Sd/- |
| ||Amar Bafna |
|Date : 30th May 2019 ||Partner |
|Place: : Mumbai ||Membership No: 048639 |
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of VARDHMANCONCRETE LIMITED ("the Company") as of 31 March 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The 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 (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment 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
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2019 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 AMAR BAFNA& ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||Firm Registration No: 114854W |
| ||Sd/- |
| ||Amar Bafna |
|Date : 30th May 2019 ||Partner |
|Place: : Mumbai ||Membership No: 048639 |