To the Members of Kalyanpur Cements Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Kalyanpur Cements
Limited (‘the Company"), which compose the Balance Sheet as at March 31,
2017, the Statement of Profit and Loss and Cash Flow Statement for the year then ended,
and a summary of significant accounting policies and other explanatory information —
Managements Responsibility for the Financial Statements
2. The management and Board of Directors of the Company are responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 (the Act) with respect to the
preparation of these financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules,
2014. This responsibility 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: design, implementation and maintenance of adequate eternal financial controls,
that are operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditors Responsibility
3 Our responsibility is to express an opinion on these financial statements based on
our audit. Wo 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 there under 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 financial statements are free from
material misstatement
4. An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures In the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
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
financial statements, that give a true and fair view. In order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on whether the Company has in place an adequate Internal financial controls system
over financial reporting and the operating effectiveness of such controls An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness
of the accounting estimate s made by the Companys management and Board of Directors, as
well as evaluating the overall presentation of the financial statements
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion
Opinion
6. In our opinion and to the best of our information and according to the explanations
given to us, the financial statements give th8 information required by the Act in the
manner so required and give a true and fan view in conformity with the accounting
principles generally accepted in India
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at
March 31, 2017;
(b) In the case of the Statement of Profit and Loss, of the loss for the year ended on
that date: and
(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the
year 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 South
Bihar 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 above
paragraph of Note 19.
(ii) In terms of para 4 of Note 19 to the Balance Sheet. Documents and papers relating
to 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 going
concern concept, the accumulated losses at the end of current financial year considering
the loss of Rs. 14534.00 Lacs for the year amount to Rs 57094.16 Lacs (Refer Note no. 2 in
Financial Statement) against the capital and reserve of Rs.4836.54 Lacs which leaves a
negative net worth of Rs.52257.62 Lacs In view of this negative networth. ability of the
Company to continue as a going concern is dependent upon tho Companys performance in
terms of the Resolution Plan to be approved by the Honble National Company Law Tribunal
(NCLT) under the provisions of Insolvency and Bankruptcy Code. 2016. The Honble NCLT has
ordered commencement of the corporate insolvency resolution process in respect of the
Company 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 (Auditors Report) Order, 2016 (the Order") issued
by the Central Government of India in terms of sub-section (11) of soction143 of the Act,
we give in the "Anmexure-1" a statement on the matters Specified in paragraphs 3
and 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 best
of 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 the
Company so far as appears from our examination of those books;
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with
by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid financial statements comply with the applicable
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules 2014.
e) The going concern matter described in sub-paragraph (III) under the Emphasis of
Matters paragraph above In our opinion, may have an adverse effect on the functioning of
the Company.
f) On the basis of written representations received from the Directors as on March 31,
2016, and taken on record by the Board of Directors, none of the Directors is disqualified
as on March 31, 2016, from being appointed as a Director in terms of Section 164(2) of the
Act.
S) With respect to the adequacy of the financial controls over financial reporting of
the Company and the operating effectiveness of such controls, refer to our separate Report
in "Annexuro-II" and
h) 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 pending litigations which impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts; as
such the question of commenting on any material foresooabo losses thereon does not arise.
iii. There has not been an occasion in case of the Company during the year under report
to transfer any sums to the Investor Education and Protection Fund.
iv. The Company has provided requisite disclosures in the financial statements as to
holdings 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 management
representation we report that the disclosures are in accordance with books of account
maintained by the Company and as produced to us by the Management - Refer Note [Note no.
19 sub clause 13 001
For M Mukerjee & Company
Chartered Accountants
Firm Registration No303013E
Spandan Sengupta
Partner
Membership No 135833
Place: Patna
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 the
information 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, including
quantitative details and situation of fixed assets.
b) As explained to us. fixed assets have been physically verified by the management at
regular intervals; In our opirvon, this periodicity of physical verification is reasonable
having regard to the size of the company and the nature of its assets. As informed to us
no material discrepancies were noticed on such verification.
c) In our opinion and according to Information and explanations given to us and on the
basis of an examination of the records of the Company, the title deeds of the immovable
properties are held in the name of the Company
(ii) The Inventory has been physically verified during the period by the management The
discrepancies noted on verification between the physical stock and the books were not
material 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 or
other 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. the
Company has not granted any loan, made any investment or provideo any guarantee or
security to any party.
(v) The Company has not accepted any deposits from the public covered under Sections 73
to 76 of the Companies Act, 2013
(vi) We have broadly reviewed the cost records maintained by the Company as prescribed
by the Central Government under Sub Section (1) of Section 148 of the Companies Act. 2013
and 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 to
determine whether they are accurate or complete
(vii) a) According to the informs bon and explanations given to us and on the basis of
examination of records of the Company, the company is not regular in depositing the
undisputed statutory dues including Provident Fund. Income-tax(TDS). Service Tax. Value
Added Tax. Royalty & Cess to the appropriate authorities The extent of outstanding
statutory dues as on 31.3.2017 for a period of more than six months from the date they
became 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 wherein
Income Tax or Sales Tax or Wealth Tax or Service Tax or duty of Custom or duty of Excise
or 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 the
Government of India disbursed through IFCI Ltd. as refered to in Note 4 to the Balance
Sheet.
(ix) The company has not raised any money by way of initial public offer or further
public offer or debt instrument. The funds raised through short term loans have been
applied for the purpose for which the same were raised
(x) According to the information and explanations given to us. no fraud by the Company
or any fraud 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 given to us. managerial remuneration
has been paid or provided in accordance with the requisite approvals mandated by the
provisions of Section 197 read with Schedule V to the Ad Reference is invited to note
20.10 to the Profit & Loss Statement for the year under report.
(xii) According to the information and explanations given to us. the Company is not a
Nidhi Company.
(xiii) According to the information and explanations given to us, all transactions with
the related parties are in compliance with Sections 177 and 188 of the Act. where
applicable and the details have been disclosed in the Financial Statements as required by
the applicable accounting standards.
(xiv) According to the information and explanation given to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares or fully or partially convertible debentures
during the year
(xv) According to the information and explanation given to us and based on our
examination of the records of the Company, the Company has not entered Into non- cash
transactions with the Directors or persons connected with him.
(xvi) According to the information and explanation given to us. the Company is not
required to bo registered under Section 45 lA of the Reserve Bank of India Act, 1934.
For M Mukerjee & Company
Chartered Accountants
Firm Registration No303013E
Spandan Sengupta
Partner
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 Section
143 of the Act
We have audited the internal financial controls over financial reporting of Kalyanpur
Cements Limited ("the Company") as at 31st March 2017 in conjunction with our
audit of the 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 ("TCAI") 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 Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls ever 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 Act 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 ICAI. 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 judgement, including the assessment of the risks of
material misstatement of the 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
The 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
a) Pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company:
b) Provide reasonable assurance that transactions are recorded as neccssary 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 authorizations of management and Directors of the Company; and
c) Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use. or disposition of the companys assets that could have a
material effect on the financial statements
Inherent Limitations of Internal Financial Control* Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, include the possibility of colliusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected. Also
projection* of any evaluation of the internal financial control* 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 ail material respects, an adequate Internal
financial control* system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31st 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 M Mukerjee & Company |
|
Chartered Accountants |
|
Firm Registration No303013E |
|
Spandan Sengupta |
| Place : Patna |
Partner |
| Date: 30-05-2017 |
Membership No 135833 |
+91-9892691696
