| We have audited the accompanying financial statements of Unimers India
Limited ("the Company"), which comprise the Balance Sheet as at 31st
March, 2015, 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. 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 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. 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
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 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 the accounting policies used and the reasonableness
of the accounting estimates made by the Company's 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. 258.57 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.4,947.38 lacs), Securities application money due for
refund of Rs. 75.21 lacs (Previous Year Rs. 75.21 lacs), Advances from
customers of Rs. 374.34 lacs (Previous Year Rs.374.59 lacs), Trade
Payables of Rs. 712.96 lacs (Previous Year Rs. 711.26 lacs), Bank
balances (Dr.) of Rs. 0.27 lacs (Previous Year Rs.0.27 lacs), Loans &
Advances recoverable of Rs. 119.65 lacs (Previous Year Rs. 120.08
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. 522.38 lacs
(Previous Year Rs. 459.78 lacs) in respect of public debentures, Rs.
1500.86 lacs (Previous Year Rs. 1059.69 lacs) in respect of secured /
unsecured loans and Rs.476.12 lacs (Previous Year Rs. 377.55 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. 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 8,382.55 lacs (as
against reported figure of Rs 5,883.19 lacs);Previous Year loss for the
year would have Rs. 2,127.03 lacs(as against reported loss of Rs.
230.01 lacs), accumulated losses would have been Rs. 11,096.75 lacs(as
against reported figure of Rs.9,199.73 lacs), other current liabilities
would have been Rs 7,713.42 lacs (as against reported figure of Rs
5,816.40 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, 2015, 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 (Auditor's Report) Order, 2015 issued
by the Central Government of India in terms of Section 143 (11) of the
Companies Act, 2013, we enclose in the Annexure 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, 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, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
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 Auditor's
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 (e) 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.
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, 2015 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 once during the year which is reasonable considering the
size and nature of its business. No material discrepancies were noticed
on such verification.
(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) In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items of
fixed assets are of special nature and suitable alternative source may
not always exist for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to the purchase of
inventory and fixed assets and for the sale of goods and services.
During the course of our audit, we have not observed any major weakness
or continuing failure to correct any major weakness in the internal
control system of the Company in respect of these areas.
(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,
no cost records and accounts as prescribed by the Central government
under section 209 (1) (d) of the act have been maintained.
(vii) (a) The Company is generally regular in depositing undisputed
statutory dues, including Provident Fund, employee's 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, 2015 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) *
The Companies Act Investor Education 164.69
& Protection Fund
BPMC Act Property Tax 342.58
Name of Statute Period to which Due Date
it relates
The Companies Act 1991-2003 1998-2011
BPMC Act October 2006 From October
to March 2015 2006 onwards
* Excluded interest and other charges/penalties as may be leviable
owing to delayed payment of the aforesaid amount.
(b) According to information and explanation 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 Forum where dispute
(Rs. in Lacs) 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
(c) The Company is required to transfer Rs. 164.69 lacs to the Investor
Education and Protection Fund in accordance with the relevant
provisions of the Act, and rules made thereunder.
(viii) The accumulated losses of the Company at the end of the
financial year exceed 50% of its net-worth. The Company has incurred
cash losses during the financial year and in the immediately preceding
financial year.
(ix) According to the information and explanations given to us and
considering that certain loans from financial institutions and Banks
have already been assigned to bodies corporate, the Company has
defaulted in repayment of dues of Rs. 1,478.73 lacs (last installment
due since March 31, 2012) to debenture holders.[Also refer para 4(e) of
the Basis of Qualified opinion paragraph in main report]
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and financial institutions.
(xi) According to the information and explanations given to us, the
Company has not raised any term loan during the year and in recent
past.
(xii) 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.
For LODHA & COMPANY
Chartered Accountants
Firm Registration No. - 301051E
R. P. BARADIYA
Partner
Membership No. 44101
Place : Mumbai
Date : May 23, 2015
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