To The Members of Unimers India Limited
1. Report on the Financial Statements
We have audited the accompanying financial statements of Unimers India Limited
("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the
Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a
summary of the significant accounting policies and other explanatory information.
2. Managements Responsibility for the 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 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 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.
3. Auditors 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 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 financial statements are free from material misstatement. An audit involves performing
procedures to obtain audit evidence about the amounts and the 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.
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 financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified audit opinion on the financial statements.
4. Basis of Qualified Opinion
(a) The accumulated losses of the Company as at the year end exceeds its entire net
worth; however the Company has been advised that since certain conditions as per the Sick
Industrial Companies (Special Provisions) Act, 1985 were not being met, it was not
eligible to make a reference to BIFR.
However, should the legal status as regards the validity of the closure of the plant
change, appropriate steps will have to be taken by the Company in this regard. Moreover,
the plant operations were suspended since October, 2007 and thereafter formally closed and
workers retrenched effective from 26th June, 2008. These financial statements have,
however, been prepared by the management on a "going concern" basis, considering
the various revival/restructuring options being pursued by the management. This being a
technical matter and in view of uncertainty, we are unable to express an opinion as to
whether the Company can now operate as a going concern. However, as explained, should the
Company be unable to continue as a going concern, there would be impact on the assets
& liabilities of the Company. The extent of the effect of the resultant adjustments to
the accumulated losses, assets and liabilities as at the year end is presently not
ascertainable.
(b) We are unable to express an opinion as to when and to what extent the carrying
value of Building of Rs. 240.64 lacs would be realised (impairment loss) in view of the
closure of all manufacturing activities since October, 2007 (subsequently formally closed
and workers retrenched effective from 26th June, 2008), the impact whereof on the loss for
the year, accumulated losses, assets and liabilities as at the year end is presently not
ascertainable.
(c) The accounts of certain lenders aggregating to Rs. 4,945.06 lacs (Previous year
Rs.4,945.06 lacs), Securities application money due for refund of Rs. 75.21 lacs (Previous
Year Rs. 75.21 lacs), Advances from customers of Rs. 385.55 lacs (Previous Year Rs.374.34
lacs), Trade Payables of Rs. 887.05 lacs (Previous Year Rs. 712.96 lacs), Bank balances
(Dr.) of Rs. 0.27 lacs (Previous Year Rs.0.27 lacs), Loans & Advances recoverable of
Rs. 121.58 lacs (Previous Year Rs. 119.65 lacs) being subject to confirmations /
reconciliations and adjustments, if any, having consequential impact on the loss for the
year, assets, liabilities and accumulated losses as at the close of the year, the amount
of adjustment if any, are as explained by the management presently not ascertainable and
therefore, not accounted for.
(d) The Company has not yet deposited long outstanding amount of Rs.164.69 lacs
(Previous year Rs.164.69 lacs) to the Investor Education & Protection Fund (IEPF) and
consequential unascertained liability of interest / other charges on the same
(e) Other than stated in para "f" below, liability as may arise towards
interest/compound interest/penalty on delayed/non-payment to certain lenders / trade
payables / statutory / workers dues has not been ascertained and not provided for.
(f) The Company has not provided interest payable of Rs. 613.04 lacs (Previous Year Rs.
522.38 lacs) in respect of public debentures, Rs. 1922.76 lacs (Previous Year Rs. 1500.86
lacs) in respect of secured / unsecured loans and Rs.574.69 lacs (Previous Year Rs. 476.12
lacs) in respect of certain other liabilities. As explained, the management is in
discussions with the parties concerned in respect of interest payable and is hopeful of
its waiver.
We further report that without considering the matter referred in para4(a) to 4(e)
above, the effect of which could not be determined, had the observation made by us in para
4(f) above been considered, the loss before tax for the year would have been Rs. 3,386.49
lacs (as against reported loss of Rs.276.00 lacs), accumulated losses would have been Rs.
12,869.26 lacs (as against reported figure of Rs.9,758.77 lacs), other current liabilities
would have been Rs 9,070.53 lacs (as against reported figure of Rs 5,960.04 lacs);Previous
Year loss for the year would have Rs. 2,636.57 lacs(as against reported loss of Rs. 137.21
lacs), accumulated losses would have been Rs. 11,982.13 lacs(as against reported figure of
Rs.9,482.77 lacs), other current liabilities would have been Rs 8282.55 lacs (as against
reported figure of Rs 5,883.19 lacs).
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 matters described in the Basis for Qualified
Opinion paragraph above, 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 principles 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
(i) As required by the Companies (Auditors Report) Order,(the Order) 2016 issued
by the Central Government of India in terms of Section 143 (11) of the Companies Act,
2013, we give in the Annexure A a statement on the matters specified in paragraphs 3 and
4 of the said Order.
(ii) As required by Section 143 (3) of the Act with respect to the adequacy of the
internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, we give in Annexure B a separate report on the same.
(iii) As required by Section 143 (3) of the Act, we further report that:
(a) Except for the effects of the matters described in the Basis for Qualified Opinion
paragraph 4(c) above, 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) Except for the effects of the matters described in the Basis for Qualified Opinion
paragraph 4(b),(d),(e) and (f) above, 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, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
(d) Except for the effects of the matters described in the Basis for Qualified Opinion
paragraph 4(b) above, in our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st
March, 2016 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2016 from being appointed as a director in terms of Section
164 (2) of the Act.
(f) The matters described in the Basis for Qualified Opinion paragraph above, in our
opinion, may have an adverse effect on the functioning of the Company.
(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 financial statements - Refer Note 17 (c) to the financial statements.
(ii) The Company did not have any long-term contracts including derivative contracts
for which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the investor
Education and Protection Fund by the Company, except as disclosed in note 4(d) of basis of
Qualified Opinion paragraph above.
|
For LODHA & COMPANY |
|
Chartered Accountants |
|
Firm Registration No. – 301051E |
|
R. P. BARADIYA |
|
Partner |
|
Membership No. 44101 |
| Place : Mumbai |
|
| Date : May 26, 2016 |
|
Annexure A
Annexure referred to in paragraph "Report on Other Legal and Regulatory
Requirements" of our report of even date on the Financial Statements as at and for
the year ended March 31, 2016 of Unimers India Limited:
(i) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) All the fixed assets have been physically verified by the management at the year -
end which is reasonable considering the size of the Company and nature of its business. No
material discrepancies were noticed on such verification.
(c) Based on verification and examination of records, the title deed of immovable
properties are held in the name of company.
(ii) (a) The inventory has been physically verified by the management at the year-end
which is considered reasonable having regard to the size of the Company and nature of its
business.
(b) The procedures for physical verification of inventory followed by the management
are reasonable and adequate in relation to the size of the Company and nature of its
business.
(c) The Company is maintaining proper records of inventory. No discrepancies were
noticed on physical verification of inventories as compared to book records.
(iii) During the year, 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.
(iv) The Company has not given any loans, made investment, issued guarantees and
securities under the provisions of section 185 and 186 of the Act. Accordingly, paragraph
3(iv) of the order is not applicable to the Company.
(v) No deposits within the meaning of directives issued by the Reserve Bank of India
and Sections 73 to 76 or any other provisions of the Companies Act, 2013 and rules framed
thereunder have been accepted by the Company.
(vi) Since plant operations have been discontinued from October 2007. Accordingly,
paragraph 3(vi) of the order is not applicable to the Company.
(vii) (a) The Company is generally regular in depositing undisputed statutory dues,
including Provident Fund, employees state insurance, income tax, wealth tax, sales tax,
service tax, duty of customs, value added tax and other material statutory dues applicable
to the Company with the appropriate authorities during the year. There were no undisputed
amount payable on account of the above dues outstanding as on March 31, 2016 for a period
of more than six months from the date they became payable except as mentioned below:
| Name of Statute |
Nature of Dues |
Amount (Rs. in Lacs) * |
Period to which it relates |
Due Date |
| The Companies Act |
Investor Education & Protection Fund |
164.69 |
1991-2003 |
1998-2011 |
| BPMC Act |
Property Tax |
406.81 |
October 2006 to March 2016 |
From October 2006 onwards |
* Excluding interest and other charges/penalties as may be leviable owing to delayed
payment of the aforesaid amount.
(b) According to information and explanations given to us, there are no dues of income
tax, sales tax, wealth tax, service tax, custom duty and value added tax during the year
which have not been deposited on account of any disputes except the following:
| Financial Year |
Nature of Dues |
Amount (Rs. in Lacs) |
Forum where dispute is pending |
| 1999-2000 |
Sales Tax |
13.49 |
Deputy Commissioner |
| 2000-2001 |
Sales Tax |
1.91 |
Appellate Tribunal |
| 2006-2007 |
Excise Duty |
62.26 |
CESTAT |
| 2007-2008 |
Cess Liability |
1.18 |
NMMC |
(viii) According to the information and explanations given to us and considering that
loans from financial institutions and Banks have already been assigned to bodies corporate
(refer note no. 6 to the Financial Statements). The Company has defaulted in repayment of
dues of Rs. 1,478.73 lacs (Previous year Rs. 1,478.73 lacs) (last installment due since
March 31, 2012) to debenture holders.[Also refer para 4(e) & (f) of the Basis of
Qualified opinion paragraph in main report]
(ix) According to the information and explanations given to us, the Company has not
raised any money by way of initial public offer or further public offer and term loans
during the year.
(x) During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing standards in India and
according to the information and explanations given to us, we have neither come across any
instance of fraud on or by the Company, noticed or reported during the year, nor have we
been informed of such case by the management.
(xi) According to the information and explanations give to us and based on our
examination of the records of the Company, the Company has not paid/provided for
managerial remuneration under provisions of section 197 read with Schedule V to the Act.
Accordingly, paragraph 3(xi) of the order is not applicable to the Company.
(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 not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year.
(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 him under section 192 of the Act.
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 LODHA & COMPANY |
|
Chartered Accountants |
|
Firm Registration No. – 301051E |
|
R. P. BARADIYA |
|
Partner |
|
Membership No. 44101 |
| Place : Mumbai |
|
| Date : May 26, 2016 |
|
Annexure B
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Act
1. We have audited the internal financial controls over financial reporting of Unimers
India Limited ("the Company") as of March 31, 2016 in conjunction with our audit
of Company for the year ended on that date
Managements Responsibility for Internal Financial Controls
2. 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 Act.
Auditors Responsibility
3. 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 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.
4. 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.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified audit opinion on the Companys internal financial
controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. 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:
(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 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
(c) 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
7. 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
8. The Companys operations were suspended since October 2007 and thereafter formally
closed and workers retrenched from June 26, 2008, however in respect of minimal activity
carried on by the Company, it has, in all material respect, has established adequate
internal finance control over financial reporting and such internal finance controls were
operating effectively as on March 31 2016, 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 LODHA & COMPANY |
|
Chartered Accountants |
|
Firm Registration No. – 301051E |
|
R. P. BARADIYA |
|
Partner |
|
Membership No. 44101 |
| Place : Mumbai |
|
| Date : May 26, 2016 |
|
+91-9892691696
