To the Members of Gujarat NRE Coke Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Gujarat NRE
Coke Limited (‘the Company), which comprise the balance sheet as at 31 March 2017,
the statement of profit and loss (including other comprehensive income), the statement of
cash flows and the statement of changes in equity for the year then ended and a summary of
the significant accounting policies and other explanatory information (herein after
referred to as "standalone Ind AS financial statements").
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these standalone Ind AS financial statements that give a true and fair view of the
financial position, financial performance including other comprehensive income, cash flows
and changes in equity of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed
under Section 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the standalone Ind
AS financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance 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 the audit to obtain reasonable assurance about whether
the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the standalone Ind AS financial statements. The procedures selected
depend on the auditors judgment, including the assessment of the risks of material
misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal financial control
relevant to the Companys preparation of the standalone Ind AS financial statements that
give a true and fair view in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Companys
Directors, as well as evaluating the overall presentation of the standalone Ind AS
financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to
provide a basis for our qualified audit opinion on the standalone Ind AS financial
statements.
Basis of Qualified Opinion
The company has incurred a net loss during the year ended March 31, 2017 and the
current liabilities of the company as on 31.03.2017 are more than its current assets.
The company has filed petition before the National Company Law Tribunal (NCLT), Kolkata
Bench u/s 10(1) of the Insolvency and Bankruptcy Code, 2016 to initiate corporate
insolvency resolution process, on the basis of resolution passed by the Board of Directors
on 21.03.2017 to this effect. The application for initiation of corporate insolvency
resolution process has been admitted along with the proposal, appointing an Interim
Resolution Professional (IRP) by the NCLT, Kolkata vide order dated 07.04.2017. Further
Mr. Sumit Binani was confirmed as the Resolution Professional by the Committee of
Creditors (CoC) at their meeting held on 5th May 2017.
This indicates the existence of a material uncertainty that may cast significant doubt
about the companys ability to continue as a going concern in the absence of any financial
support from the Promoters and Bankers. However, the financial statements of the company
have been prepared on a going concern basis.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion paragraph above, the aforesaid standalone Ind AS financial statements give the
information required by the Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India including the Ind
AS, of the financial position of the Company as at 31 March, 2017, and its financial
performance including other comprehensive income, its cash flows and the changes in equity
for the year ended on that date.
Other Matters
The comparative financial information of the Company for the year ended 31st March 2016
and the transition date opening balance sheet as at 1st April 2015 included in these
standalone Ind AS financial statements, are based on the previously issued statutory
financial statements prepared in accordance with the Companies (Accounting Standards)
Rules, 2006 audited by N.C.Banerjee & Co. (Previous Auditor) and their report for the
year ended 31st March 2016 and 31st March 2015 dated 29th May 2016 and 25th May 2015
respectively, expressed an unmodified opinion on those standalone financial statements and
have been restated to comply with Ind AS. Adjustments made to the previously issued said
statutory financial information for the differences in the accounting principles adopted
by the Company on transition to the Ind AS have been audited by us. Our opinion is not
modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government of India in terms of section 143(11) of the Act, we give
in the Annexure-A, a statement on the matters specified in the paragraph 3 and 4 of
the order.
2. As required by Section 143(3) of the Act, we report that:
(a) we have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit.
(b) in our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books;
(c) the balance sheet, the statement of profit and loss, the statement of cash flows
and the statement of changes in equity dealt with by this Report are in agreement with the
books of account;
(d) in our opinion, the aforesaid standalone Ind AS financial statements comply with
the Accounting Standards specified under Section 133 of the Act read with relevant rule
issued thereunder;
(e) on the basis of the written representations received from the directors as on 31
March 2017 taken on record by the Board of Directors, none of the directors is
disqualified as on 31 March 2017 from being appointed as a director in terms of Section
164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B"; and
(g) with respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financial
position in its standalone Ind AS financial statements Refer Note 35 to the
standalone Ind AS financial statements;
ii. the Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts Refer Note 39 to the standalone Ind AS financial statements;
iii. there has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company; and
iv. the Company has provided requisite disclosures in the Standalone Ind AS financial
statements as to holdings as well as dealings in Specified Bank Notes as defined in the
Notification S.O. 3407(E) dated 8thNovember, 2016 of the Ministry of Finance, during the
period from 8th November 2016 to 30th December 2016. Based on audit procedures and relying
on management representation we report that the disclosures are in accordance with the
books of accounts maintained by the Company and as produced to us by the Management. Refer
Note 44 to the standalone Ind AS financial statements.
|
For NANDY HALDER & GANGULI |
|
Chartered Accountants |
|
(Firm Registration No. 302017E) |
|
R. P. NANDY |
| Kolkata |
Partner |
| 30 May, 2017 |
Membership No. 051027 |
[Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements
in the Independent Auditors Report of even date to the members of Gujarat NRE Coke Ltd.
on the standalone Ind AS financial statements for the year ended 31 March 2017.
(i) (a) The Company has maintained proper records showing full, including quantitative
details and situation of fixed assets
(b) The Company has a regular programme of physical verification of its fixed assets by
which fixed assets are verified in a phased manner during the year. No material
discrepancies were noticed on such verification. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the Company and the
nature of its assets.
(c) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties are
held in the name of the Company.
(ii) During the year inventories have been physically verified by the management at
reasonable intervals. In our opinion, the frequency of verification is reasonable. We were
explained that the discrepancies noticed during the physical verification of inventories
were not material and have been properly dealt with in the books of accounts.
(iii) The Company has not granted loans, secured or unsecured to companies, firms, LLPs
or other parties covered in the register maintained under section 189 of the Companies
Act, 2013. Accordingly, sub-clauses (a), (b) and (c) of clause (iii) of paragraph 3 of the
Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of section 185 and 186 of the Act, with respect
to the loans and investments made.
(v) The Company has not accepted any deposits from the public hence this clause is not
applicable.
(vi) We have broadly reviewed the cost records maintained by the company as prescribed
by the central government under Section 148(1) of the Companies Act, 2013 and are of the
opinion that prima facie the prescribed cost records have been maintained. We have,
however, not carried out a detailed examination of such records, nor are we required to do
so, with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis of
our examination of the records of the Company, in our opinion the company has been
generally regular in depositing with appropriate authorities undisputed statutory dues
including provident fund, employees state insurance, income-tax, sales tax, duty of
excise, value added tax, duty of customs, service tax, cess and other material statutory
dues.
According to the information and explanations given to us, no undisputed amounts
payable in respect of provident fund, income tax, sales tax, value added tax, duty of
customs, service tax, cess and other material statutory dues were in arrears as at 31
March 2017 for a period of more than six months from the date they became payable during
the year except:
a. Income Tax Rs. 4.12 crores
b. VAT Rs 6.84 Crores
(b) According to the information and explanations given to us, there were no dues of
income tax, sales tax, value added tax, duty of customs, service tax, cess which have not
been deposited with the appropriate authorities on account of any dispute, except the
following:
|
|
|
|
(Rs. Crores) |
| Name of the statute |
Nature of dues |
Amount |
Period to which the amount relates |
Forum where dispute is pending |
|
|
(in Crores) |
|
|
| Income Tax Act, 1961 |
Regular Assessment |
149 |
A.Y.- 2010-11, 2012-13, 2013-14, |
CIT (Appeals)/ITAT |
| Finance Act, 1994 (Act 32 of 1994) |
Service Tax |
1.19 |
2010-11 |
CESTAT |
|
|
1.42 |
2011-12 |
CESTAT |
|
|
0.01 |
2012-13 |
CESTAT |
|
|
0.52 |
2013-14 |
CESTAT |
|
|
0.04 |
2013-14 |
Commissioner (Appeals) |
|
|
0.81 |
2014-15 |
CESTAT |
|
|
0.02 |
2014-15 |
Commissioner (Appeals) |
|
|
3.48 |
2015-16 |
Commissioner |
| The Customs Act, 1962 |
Custom Duty |
12.64 |
2008-09, 2009-10, 2010-11,2014-15 |
CESTAT |
| The Central Excise Act, 1944 |
Excise Duty |
0.27 |
2010-11 |
Additional. Comm. |
|
|
0.44 |
2011-12 |
Joint Commissioner |
|
|
0.83 |
2012-13 |
CESTAT |
|
|
0.01 |
2012-13 |
Superintendent CE |
|
|
3.46 |
2013-14 |
CESTAT |
|
|
3.47 |
2015-16 |
Commissioner |
(viii) In our opinion and according to the information and explanations given to us,
the Company has defaulted in repayment of loans and borrowings to financial institutions,
banks and dues to debenture holders, the details of which are given below:
|
|
|
|
|
(Rs. In Crores) |
| Particulars |
Delays upto 30 days |
31-90 days |
91-180 days |
Beyond 180 days |
Total Amount |
| Letter of Credit/Bill Discounting/ Installments/Overdrawings |
1.85 |
34.92 |
64.91 |
420.92 |
522.60 |
| Interest |
30.03 |
80.44 |
75.36 |
248.83 |
434.66 |
(ix) The Company did not raise any money by way of initial public offer or further
public offer (including debt instruments) during the year. In our opinion and according to
the information and explanations given to us, the Company has applied the term loans for
the purpose for which they were raised.
(x) According to the information and explanations given to us, no material fraud by the
Company or on the Company by its officers or employees has been noticed or reported during
the course of our audit.
(xi) According to the information and explanations give to us and based on our
examination of the records of the Company, the Company has paid/provided for managerial
remuneration in accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the
Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not
applicable.
(xiii) According to the information and explanations given to us and based on our
examination of the records of the Company, transactions with the related parties are in
compliance with sections 177 and 188 of the Act where applicable and details of such
transactions have been disclosed in the financial statements as required by the applicable
accounting standards.
(xiv) According to the information and explanations give to us and based on our
examination of the records of the Company, the Company has complied with Section 42 of the
Companies Act, 2013 in making preferential allotment and private placement of shares
during the year and the amounts raised have been used for the purposes for which the funds
were raised.
(xv) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with directors or persons connected with them. Accordingly, paragraph 3(xv)
of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act 1934.
|
For NANDY HALDER & GANGULI |
|
Chartered Accountants |
|
(Firm Registration No. 302017E) |
|
R. P. NANDY |
| Kolkata |
Partner |
| 30 May, 2017 |
Membership No. 051027 |
Annexure B to the Independent Auditors Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Gujarat NRE
Coke Limited ("the Company") as of 31 March 2017 in conjunction with our audit
of the standalone Ind AS financial statements of the Company for the year ended on that
date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India (‘ICAI). These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to companys policies, the safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with 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
to be prescribed under section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of
India. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the standalone Ind AS financial statements, whether due to fraud
or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys 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 financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31 March 2017, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
|
For NANDY HALDER & GANGULI |
|
Chartered Accountants |
|
(Firm Registration No. 302017E) |
|
R. P. NANDY |
| Kolkata |
Partner |
| 30 May, 2017 |
Membership No. 051027 |
+91-9892691696
