| 1. We have audited the accompanying financial statements of Kalyanpur
Cements Limited ("the Company"), which comprise the Balance Sheet as at
March 31,2015, 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
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 internal
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
Auditor's Responsibility
3. 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
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 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 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 estimates made by the Company's 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 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:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2015;
(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.
Report on Other Legal and Regulatory Requirements
7. 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 section143 of the Act, we give in the Annexure a
statement on the matters Specified in paragraphs 3 and 4 of the Order.
8. 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) On the basis of written representations received from the directors
as on March 31,2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2015, from being
appointed as a director in terms of Section 164(2) of the Act
f) In our opinion and to the best of our information and according to
the explanations given to us, we report as under with respect to other
matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014.
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 foreseeable 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.
Emphasis on Matters
(i) As stated in para 1.1 and 1.2 of Note 19 to the Balance Sheet, the
claims of BSEB are disputed in respect of 33 KV and 132 KV power
connections. The nature of dispute & the details relating thereto have
been explained in the above paragraphs 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
Banjari are deposited with IFCI Ltd. Which assigned its loan earlier
granted to the Company to Arcil - Kalyanpur Cements Ltd. Trust.
(ill) 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. 3470.84 Lacs for the
year amount to Rs. 34669.64 Lacs against the capital and reserve of Rs.
4836.54 Lacs which leaves a negative networth of Rs.29833.10 Lacs. In
view of this negative networth, ability of the Company to continue as a
going concern is dependent upon the Company's performance after the
scheme sanctioned by BIFR. Reference may be made to clause no. (x) Of
annexure to Auditors Report read with para 5 of Note 19 to the Balance
Sheet.
Annexure referred to in paragraph 7 Our Report of even date to the
members of Kalyanpur Cements Limited ("the Company") on the accounts of
the company for the year ended 31 st March, 2015
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) The fixed assets have been physically verified by the management at
reasonable intervals and material discrepancies, if any, have been
properly dealt with in the books of account.
(ii) According to the information and as explained to us :
a) Physical verification of inventory has been conducted at reasonable
intervals by the management.
b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification
(iii) The company has not granted any loans, secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under section 189 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Conv, iy and the nature of its business, for the
purchase of fixed assets and for the sale of goods. Further, on the
basis of our examination of the books and records of the Company and
according to the information and explanations given to us, no major
weakness has been noticed or reported.
(v) The Company has not accepted any deposits from the public covered
under Section 73 to 76 of the Companies Act, 2013.
(vi) The Company is required to maintain cost records in respect of
clinker and cement production. We have broadly reviewed the books and
prima facie it appears to us that the books and records are maintained.
We have, however, not made a detailed examination of the books to
ascertain if they are correctly maintained.
(vii) According to information and as explained to us, there have been
delays in depositing undisputed statutory dues including Provident
Fund, Employees' State Insurance, Income-tax, Value added tax, Service
Tax, Excise Duty, cess and other statutory dues with the appropriate
authorities. The extent of arrears as on 31st March, 2015 in respect of
dues over six months are as below
a) Royalty on Limestone & Cement Cess - Rs. 1612.90 Lacs
As per information and explanation received, Royalty dues including the
dues as per BIFR sanctioned scheme amount to Rs. 1612.90 Lacs .
b) Cement Regulation Account - Rs.208.23 Lacs
The above dues of Cement Regulation Account have been settled in the
Scheme sanctioned by BIFR and are payable as per the sanctioned scheme.
It has been explained that Company has challenged the said dues in the
Hon'ble Delhi High Court and the case is yet to be decided.
c) Provident Fund, EPS - Rs.1530.28 Lacs
d) Tax deducted at Source (TDS) - Rs. 201.88 Lacs
e) VAT dues for the F.Y. 2014-15 - Rs. 1983.95 lacs All the dues except
at (b) above are undisputed.
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.
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. .
(viii) According to the information and as explained to us, the
accumulated losses at the end of financial year are not less than fifty
percent of its net worth. It has made Cash Loss in the current as well
as in the immediately preceding financial year.
(ix) Some default has taken place in payment of the Central Excise loan
of the Government of India disbursed through IFCI Ltd. as referred to
in Note 4 to the Balance Sheet.
(x) In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loan taken by
others from a bank or financial institution during the year.
(xi) In our opinion, and according to the information and explanations
given to us, the company has not raised any term loan during the year.
(xii) During the course of our examination of the books and records of
the company, carried in accordance with the auditing standards
generally accepted in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the course of
our audit nor have we been informed of any such instance by the
Management.
For M Mukerjee & Company
Chartered Accountants
Spandan Sengupta
Partner
Membership No. 135833
Firm Registration No. 303013E
Place: Patna
Date: 22.05.2015
| 