Independent Auditor’s Report
To the Members of
RAMSARUP INDUSTRIES LIMITED Report on the Financial Statements
We have audited the accompanying financial statements of Ramsarup Industries Limited,
which comprise the Balance Sheet as at March 31, 2016, and 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.
Management’s Responsibility for the Financial Statements
The Company’s 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 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 the Companies (Accounts) Rules, 2014. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding of 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 financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these 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 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.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the
auditor’s 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 Company’s
preparation and fair presentation of the financial statements 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 estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion on
the financial statements.
Basis for Qualified opinion:-
1) The Company has four manufacturing units at Kalyani, Shyamnagar,Kharagpur, and
Durgapur, all of which are under the suspension of work for the last few years and they
are under the symbolic /physical possession of lenders due to default of payment of the
outstanding loans. Detail physical verifications of fixed assets and inventories could not
be conducted by the management. We have also not been able to obtain sufficient
appropriate audit evidences (SAAE) in respect of existence and valuation of fixed assets
and inventories lying at these factories.
2) Since manufacturing activity in the company has been suspended in all its
manufacturing units (except generation of power in wind mills). There are indication which
suggest impairment in the value of Plant & Machinery and other Fixed Assets of the
company which has not been done.
3) Borrowings from banks and financial institutions have been classified as
nonperforming assets by the lenders. No balance confirmation of the outstanding loan could
be obtained nor any bank statement has been provided by them. In absence of the same, we
are unable to confirm the accuracy of the balances appearing in the books of account. As
the borrowings have been considered as NPA, no interest has been charged by the banks
since then. The company has not provided interest on these borrowings from 1st
July, 2014 to 31st March, 2016 which amounts to Rs. 998.80 Crores (previous period Rs.
395.84 Crores from 1st July, 2014 to 31st March, 2015).
4) The net worth of the company has been fully eroded and therefore the company filed
an application before the Ld. BIFR which is still pending. The Company’s ability to
continue the business as going concern is significantly dependent upon the viability of
the restructuring plan to be approved by the Ld. BIFR.
5) As explained to us although necessary Security / Watch & Ward arrangements have
been made for safety of the plant by the company, its lenders or ARC at its various
manufacturing units yet precautionary safety action against risk of fire, burglary or
natural calamity needs to be taken.
Qualified Opinion:-
In our opinion and to the best of our information and according to the explanations
given to us, except for the possible effects of the matter described in the basis for
qualified opinion paragraph, the aforesaid 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 principle generally accepted in India of the state of affairs of the
company as at 31st March 2016, and its Loss and its Cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and obtained and except for the matters described in the basis for
Qualified Opinion paragraph, all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit.
b) Except for the possible effects of the matter described in the basis for Qualified
Opinion Paragraph above, 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) Except for the possible effects of the matter described in the basis for Qualified
Opinion Paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards specified under section 133 of
the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) The matter described in the basis for Qualified Opinion 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.
g) The Qualification relating to the maintenance of accounts and other matters
connected therewith are as stated in the basis for qualified opinion paragraph above.
h) With respect to other matters to be included in the Auditor’s Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rule 2014,in our opinion and
to the best of our information and according to the explanations given to us:
i) A number of litigations have been filed by some of the lender banks and creditors of
the company against which primary liabilities stands provided in the books except for
other claims and interest thereon. Apart from these various statutory / non-statutory
liabilities as stated in Note no 33 of financial statement have not been provided for
although the financial impact thereon have been disclosed. ii) The Company is carrying on
infrastructure work at Rajasthan wherein substantial delay has happened for various
reasons in execution of the contract. This leads to cancellation of contract and losses so
incurred will be ascertained at the relevant time. Total outstanding work contract is not
ascertainable at present in view of contracts being cancelled for non completion but
against all the pending contracts bank guarantee have been provided of Rs. 1.37 crore.
There are no outstanding derivative contracts in the Company. iii) There has been no delay
in transferring amounts required to be transferred to the Investor Education &
Protection Fund by the Company.
|
For P. K. Lilha & Co. |
|
Chartered Accountants |
|
FRN: 307008E |
|
CA C.S. Agrawal |
| Place: Kolkata |
Partner |
| Date : 03.05.2016 |
Membership No. : 059534 |
"ANNEXURE A" - TO THE INDEPENDENT AUDITOR’S REPORT
The Annexure referred to in our Independent Auditors’ Report to the members of the
Company on the financial statements for the year ended 31st March 2016, We report that: i)
In respect of its Fixed Assets:
a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
b) It has been confirmed by the Management that all the Title Deeds in respect
immovable properties of both lease hold / free hold land are in the name of the company.
c) As explained to us due to suspension of work in all its manufacturing units, some of
which are in symbolic / physical possession of banks / Asset Reconstruction Company (ARC).
As such it has not been possible for the company to have physical verification done and
as such discrepancy if any could not be ascertained. ii) In respect of its Inventories:
a) As explained to us the Inventories could not be physically verified by the
management due to suspension of its manufacturing units, some of which are in symbolic /
physical possession of banks / Asset Reconstruction Company (ARC). The Stock has been
taken on the basis of previous year at the same estimated realizable value as the status
of material could not be verified.
b) The Company has been maintaining proper records of its inventories at the respective
works but in absence of physical verifications of inventories, actual comparison with book
records have not been possible.
iii) As informed to us, the Company during the year has not granted any loan, secured
or unsecured to companies, firms, Limited Liability Partnership or other parties covered
in register maintained under section 189 of the Companies Act, 2013. Accordingly, the
provisions of sub clause (iii) (b) & (c) of the Companies (Auditors Report) order,
2013 (as amended) are not applicable.
iv) In respect of loans, investments, guarantees and security, provisions of section
185 and 186 of the Companies Act 2013 have been complied with. However, the company during
the year, has not given loan or provided guarantee or security to any person or other body
corporate and not made any investment. v) According to the information and explanation
given to us, the Company has not accepted any deposit from the public; therefore the
provisions of clause (v) of the order are not applicable to the company.
vi) We have broadly reviewed the Books of Accounts maintained by the company in respect
of generation of electricity where pursuant to the rules made by the Central Government of
India, the maintenance of Cost Records have been prescribed U/s 148(1) of the Act and are
of the opinion that prima facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the records with a view
to determine whether they are accurate or complete.
vii) In respect of Statutory Dues: a) According to the information and explanations
given to us and on the basis of records of the Company, amount deducted / accrued in the
books of accounts in respect of undisputed statutory dues including Provident Fund,
Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of
Excise, Value Added Tax, Cess and other material statutory dues have been regularly
deposited with appropriate authorities during the year except the delays as below:
Statement of arrears of Statutory Dues outstanding for more than six months from the date
they become payable up to 31.03.2016:
| Sl. No. |
Name of Statute |
Amount ( Rs. in lacs) |
| i) |
Excise Duty Demand for F.Y. 2010-11 |
307.50 |
| ii) |
ESI Contribution |
6.54 |
| iii) |
Professional Tax |
1.41 |
| Total |
|
315.45 |
b) The disputed statutory dues that have not been deposited {Net of Amount Paid Under
Protest} on account of disputed matter pending before appropriate authorities are as
under:
| Sl. |
Name of Statute |
Nature of Dues |
Amount ( Rs. in Lacs) |
Period to which amount relates |
Forum where dispute is pending |
| 1 |
West Bengal Sales |
Sales Tax |
59.41 |
Various Years from |
Appellate & |
|
Tax Act, 1994 |
|
|
1994-95 to1999-00 |
Revisional Board |
| 2 |
West Bengal Sales |
Sales Tax |
3,576.58 |
2004-05 |
Appellate & |
|
Tax Act, 1994 |
|
|
|
Revisional Board |
| 3 |
West Bengal VAT Tax |
VAT |
4,015.57 |
2005-06 |
Appellate & |
|
Act, 2003 |
|
|
|
Revisional Board |
| 4 |
West Bengal VAT Tax |
VAT |
16.24 |
2006-07 |
Appellate & |
|
Act, 2003 |
|
|
|
Revisional Board |
| 5 |
West Bengal VAT Tax |
VAT |
701.99 |
2007-08 |
Appellate & |
|
Act, 2003 |
|
|
|
Revisional Board |
| 6 |
West Bengal VAT Tax |
VAT |
696.60 |
2008-09 |
Appellate & |
|
Act, 2003 |
|
|
|
Revisional Board |
| 7 |
West Bengal VAT Tax |
VAT |
1,433.79 |
2009-10 |
Appellate & |
|
Act, 2003 |
|
|
|
Revisional Board |
| 8 |
West Bengal VAT Tax |
VAT |
2,613.51 |
2010-11 |
Appellate & |
|
Act, 2003 |
|
|
|
Revisional Board |
| 9 |
West Bengal VAT Tax |
VAT |
1,550.63 |
2011-12 |
Appellate |
|
Act, 2003 |
|
|
|
Forum CD-01 |
| 10 |
Central Sales Tax Act, |
Sales Tax |
51.68 |
Various Years from |
Appellate & |
|
1956 |
|
|
1994-95 to 1999-00 |
Revisional Board |
| 11 |
Central Sales |
Sales Tax |
200.63 |
Various Years from |
Kolkata High Court |
|
Tax Act, 1956 |
|
|
2000-01 to 2003-04 |
|
| 12 |
Central Sales |
Sales Tax |
306.17 |
2004-05 & 2005-06 |
Appellate & |
|
Tax Act, 1956 |
|
|
|
Revisional Board |
| 13 |
Central Sales |
Sales Tax |
1,033.76 |
2006-07 & 2007-08 |
Appellate & |
|
Tax Act, 1956 |
|
|
|
Revisional Board |
| 14 |
Central Sales |
Sales Tax |
865.41 |
2008-09 |
Appellate & |
|
Tax Act, 1956 |
|
|
|
Revisional Board |
| 15 |
Central Sales |
Sales Tax |
71.23 |
2009-10 |
Appellate & |
|
Tax Act, 1956 |
|
|
|
Revisional Board |
| 16 |
Central Sales |
Sales Tax |
172.03 |
2010-11 |
Appellate & |
|
Tax Act, 1956 |
|
|
|
Revisional Board |
| 17 |
Central Sales |
Sales Tax |
5.63 |
2011-12 |
Appellate |
|
Tax Act, 1956 |
|
|
|
Forum CD-01 |
| 18 |
Employee State |
ESI |
26.03 |
Various Years from |
EI Court |
|
Insurance |
|
|
2002-03 to 2006-07 |
|
| 19 |
Employee State |
ESI |
6.54 |
2001-02 and |
EI Court |
|
Insurance |
|
|
2002-03 |
|
| 20 |
Provident Fund Act |
PF |
19.90 |
Various Years from |
Assistant / Regional |
|
|
|
|
2009-10 to 2013-14 |
P. F. Commissioner |
| 21 |
Service Tax Act |
Service Tax |
4422.54 |
Various Years from |
Service Tax |
|
|
|
|
2007-08 to 2011-12 |
Commissionerate |
|
|
|
|
|
(Kol) (CBEC) |
| 22 |
Commissioner of |
Excise Duty |
467.85 |
2008-09 |
The Customs, |
|
Central Excise |
|
|
|
Excise |
|
|
|
|
|
and Service Tax |
|
|
|
|
|
Appellate Tribunal |
| 23 |
Commissioner of |
Excise Duty |
15.00 |
2009-10 |
The Customs, |
|
Central Excise |
|
|
|
Excise |
|
|
|
|
|
and Service Tax |
|
|
|
|
|
Appellate Tribunal |
| 24 |
Commissioner of |
Excise Duty |
454.28 |
2010-11 |
The Customs, |
|
Central Excise |
|
|
|
Excise |
|
|
|
|
|
and Service Tax |
|
|
|
|
|
Appellate Tribunal |
| 25 |
Commissioner of |
Excise Duty |
620.43 |
2011-12 |
The Customs, |
|
Central Excise |
|
|
|
Excise |
|
|
|
|
|
and Service Tax |
|
|
|
|
|
Appellate Tribunal |
| 26 |
Income Tax Act, 1961 |
Income Tax |
417.67 |
A.Y. 2007-08 |
C I T (A) |
| 27 |
Income Tax Act, 1961 |
Income Tax |
1141.81 |
A.Y. 2008-09 |
C I T (A) |
| 28 |
Income Tax Act, 1961 |
Income Tax |
674.30 |
A.Y. 2010-11 |
C I T (A) |
| 29 |
Wealth Tax Act, 1957 |
Wealth Tax |
1.66 |
A.Y. 2010-11 |
C I T (A) |
viii) The company has defaulted in repayment of loans or borrowing to the financial
institutions and bank in respect of secured / unsecured loans for last few years. However
since such loan have been classified as NPA, no account statement or balance confirmation
could be made available to us. The company has therefore provided interest of Rs. 1,332.06
Crore till June, 2014 and not provided of Rs. 998.80 Crore thereafter being interest at
such rate / rates including penal interest if any. Interest has been computed on basis of
last sanctioned letters. Hence amount due may vary with Banks / Financial Institutions and
Financial Statements. Quantum of such interest has been reported under the head current
liabilities in the financial statement. The applicable details as at 31.03.2016 are as
under, exclusive of such interest. a) To Banks:
| Name of the Banks |
Principal O/S Amount |
|
( Rs. in Crore) |
| 1 Allahabad Bank |
94.34 |
| 2 Axis Bank |
147.99 |
| 3 Bank of India |
58.84 |
| 4 Canara Bank |
87.07 |
| 5 Central Bank of India |
11.70 |
| 6 Development Credit Bank |
14.76 |
| 7 Federal Bank |
67.75 |
| 8 ICICI Bank |
36.16 |
| 9 IDBI Ltd. |
240.78 |
| 10 Indian Overseas Bank |
75.64 |
| 11 ING Vysya Bank |
19.43 |
| 12 IREDA |
4.68 |
| 13 Oriental Bank of Commerce |
115.17 |
| 14 Punjab National Bank |
411.91 |
| 15 SIDBI |
14.99 |
| 16 State Bank of India |
64.63 |
| 17 The Karur Vysya Bank |
64.60 |
| 18 UCO Bank |
79.02 |
| 19 United Bank of India |
184.34 |
| 20 Vijaya Bank |
44.97 |
| TOTAL |
1838.78 |
b) To Financial Institutions:
| Name of Financial Institutions |
Principal O/S Amount |
|
( Rs. in Crore) |
| 1 Bibby Financial Services (I) Pvt. Ltd. |
7.53 |
| 2 Edelweiss Finance & Investments Ltd. |
1.95 |
| 3 SBI Global Factors Ltd. |
34.18 |
| 4 IFCI Ltd. |
22.13 |
| 5 IFCI Factors Ltd. |
10.60 |
| 6 TATA Capital Ltd. |
20.09 |
| 7 LIC Mutual Fund |
40.00 |
| 8 SREI Equipment Finance Pvt. Ltd. |
5.18 |
| 9 WBIDCL |
14.22 |
| TOTAL |
155.89 |
Some of the lender banks have already assigned part/full of their debts together with
the underline securities, right title and interest thereon to some of the Assets
Re-construction Companies. But no impact has been given in the financial statements in
absence of any documentation to this effect.
ix) During the year no money raised by way of Initial Public Offer (IPO) or Further
Public Offer (FPO) (including debt instruments) and term loans, hence, other details are
not applicable.
x) Based upon the audit procedures performed and information and explanation given by
the management, we report that no material fraud on or by the company has been noticed or
reported during the course of our audit.
xi) During the year no managerial remuneration has been paid or provided, hence other
details are not applicable.
xii) Provisions of Nidhi Company is not applicable.
xiii) As per information and explanations given to us no related party transactions
have been made as contemplated within the meaning of Section 188 of Companies Act, 2013.
However, the disclosures as required under Accounting Standards 18 have been made in the
financial statements.
xiv) The company has not made any preferential allotment or private placement of shares
or any convertible debentures during the year under review as such other details are not
applicable.
xv) As per information and explanations given to us, the company has not entered into
any non cash transactions with the Directors or persons connected with him. Hence,
provisions of Section 192 of Companies Act, 2013 is not applicable.
xvi) As explained to us the company is not required to get registration u/s 45-IA of
the Reserve Bank of India Act, 1934.
|
For P. K. Lilha & Co. |
|
Chartered Accountants |
|
FRN: 307008E |
|
CA C.S. Agrawal |
| Place: Kolkata |
Partner |
| Date : 03.05.2016 |
Membership No. : 059534 |
"ANNEXURE B" - TO THE INDEPENDENT AUDITOR’S REPORT
Report on the Internal Financial Controls Over Financial Reporting 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 RAMSARUP
INDUSTRIES LIMITED ("the Company") as of March 31, 2016 in conjunction with our
audit 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 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 company’s 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s 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") issued by the Institute of Chartered Accountants of India
(ICAI) and the Standards on Auditing prescribed under Section 143(10) of the Companies
Act, 2013, to the extent applicable to an audit of internal financial controls. 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 auditor’s judgment, 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 Company’s internal financial controls
system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company’s 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 company’s 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
authorizations of management and directors of the company; and (3) Provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’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 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, to the best of our information and according to the explanations given
to us, the Company has maintained, in all material respects, adequate internal financial
controls over financial reporting and such internal financial controls over financial
reporting were operating effectively as of March 31, 2016, 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).
|
For P. K. Lilha & Co. |
|
Chartered Accountants |
|
FRN: 307008E |
|
CA C.S. Agrawal |
| Place: Kolkata |
Partner |
| Date : 03.05.2016 |
Membership No. : 059534 |
+91-9892691696
