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« Mar 13
Auditor's Report (Gujarat NRE Coke) Year End : Mar '14
We have audited the accompanying financial statements of Gujarat NRE
 Coke Limited (the Company), which comprise the Balance Sheet as at
 March 31, 2014, 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
 
 Company''s Management is responsible for 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 Standards, notified under the Companies
 Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th
 September, 2013 of the Ministry of Corporate Affairs in respect of
 Section 133 of the Companies Act, 2013 and in accordance with the
 accounting principles generally accepted in India. This responsibility
 includes the design, implementation and maintenance of internal control
 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 conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. 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 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 the effectiveness of the Company''s
 internal control. 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.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, 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:
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2014;
 
 b) in the case of the Statement of Profit and Loss, of the loss of the
 Company 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
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Act, we report that:
 
 a) we have 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 Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement comply with the Accounting Standards notified under
 the Act read with the General Circular 15/2013 dated 13th September,
 2013 of the Ministry of Corporate Affairs in respect of Section 133 of
 the Companies Act, 2013;
 
 e) on the basis of written representations received from the directors
 as on March 31, 2014, and taken on record by the Board of Directors,
 none of the directors is disqualified as on March 31, 2014, from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Act;
 
 f) Since the Central Government has not issued any notification as to
 the rate at which the cess is to be paid under section 441A of the
 Companies Act, 1956 nor has it issued any Rules under the said section,
 prescribing the manner in which such cess is to be paid, no cess is
 considered due and payable by the Company as on 31.03.2014.
 
 Annexure to Independent Auditor''s Report
 Referred to in Paragraph 1 under the heading of Report on Other Legal
 and Regulatory Requirements of our report of even date
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) We were informed that the Company has a phased programme of
 physical verification of all its fixed assets which, in our opinion, is
 reasonable having regard to the size of the Company and the nature of
 its assets. In accordance with this programme, fixed assets were
 physically verified by management during the period under review and no
 material discrepancy was noticed on such verification.
 
 (c) Fixed assets disposed off during the year under review were not
 substantial and the going concern status of the company is not
 affected.
 
 (ii) (a) During the year inventories have been physically verified by
 the management at reasonable intervals.  In our opinion, the frequency 
 of verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 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 has maintained proper records of inventory. We were
 explained that the discrepancies noticed during the physical
 verification of inventories as compared to book records were not
 material and have been properly dealt with in the books of account.
 
 (iii) In our opinion and according to the information and explanations
 given to us, the company has not granted or taken loans, Secured or
 Unsecured, to/from the companies, firm or other parties covered in the
 
 Register maintained under section 301 of the Companies Act, 1956,
 consequently sub clauses (a) to (g) of clause (iii) of paragraph 4 of
 the order is not applicable to the company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there exists an adequate internal control system 
 commensurate with the size of the company and the nature of its 
 business with regard to purchases of inventory and fixed assets and 
 with regard to the sale of goods and services. No major continuing 
 weakness in internal control system was observed.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that particulars of all the transactions made in
 pursuance of contracts or arrangements referred to in section 301 of
 the Companies Act, 1956 have been entered in the register required to
 be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding value of rupees five lacs in
 respect of each party during the year have been made at prices which
 appear to be reasonable having regard to prevailing market prices at
 the relevant time.
 
 (vi) According to the information and explanations given to us, the
 
 Company has not accepted any deposits from the public and consequently,
 the directives issued by the Reserve Bank of India and the provisions
 of Section 58A, 58AA or any other relevant provisions of the Companies 
 Act, 1956 and the rules framed there under are not applicable to the 
 Company.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and the nature of its business but it has to
 be further strengthened.
 
 (viii) We have broadly reviewed the cost records maintained by the
 company pursuant to the Companies (Cost Accounting Records) Rules, 2011
 prescribed by the Central Government under Section 209(1) (d) of the
 Companies Act, 1956 and are of the opinion that prima facie the
 prescribed cost records have been maintained. We have, however, not
 carried out a detailed examination of such records, nor we are required
 to do so, with a view to determine whether they are accurate or
 complete.
 
 (ix) (a) According to the information and explanations given to us and
 on the basis of our examination of the books of account, the Company 
 has been regular in depositing undisputed statutory dues including
 Provident Fund, Investor Education and Protection Fund, Employees''
 State Insurance, Wealth Tax, Customs Duty, Excise Duty, Cess and any
 other material statutory dues except Income Tax, Sales Tax and Service
 Tax where the amount has not been regularly deposited with the
 appropriate authorities and there has been delays in a large number of
 cases.
 
 The Central Government has not notified the date of levy and collection
 of cess under Rehabilitation & Revival Fund as per section 441 A of the
 Companies act, 1956.
 
 (b) According to the information and explanations given to us, no
 undisputed amount payable in respect of Income Tax, Sales Tax, Wealth
 Tax, Service Tax, Custom duty and Excise duty were in arrear as at 31st
 March, 2014, for a period of more than six months from the date those
 became payable, except for the Sales Tax/VAT/CST and Income Tax as
 given below-
 
 Name of the statute               Nature of Dues      Amount
                                                    (Rs./Crores)
 
 Gujarat Value Added Tax Act, 2003 Sales Tax/VAT/CST   11.18
 
 Income Tax Act,1961               Income Tax           5.92
 
 (c) According to the information and explanations given to us and the
 records of the company examined by us, there were no dues in respect of
 Income
 
 Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and
 Cess that have not been deposited with the appropriate authorities
 other than disputed liabilities mentioned below:-
 
 Name of the statute    Nature of              Amount
                         Dues                (Rs./Crores)
 
 Income Tax Act, 1961    Regular Assessment      1.86
 
 Finance Act, 1994       Service Tax             3.39 
 (Act 32 of 1994)        
 Chapter V & VA
 
 The Customs Act, 1962   Custom Duty            12.50
 
                         Period to which the Forum where/
 Name of the Statute    amount Relates       disputes are pending
 
 Income Tax Act 1961       2006-07           Commissioner of Income Tax
                           2010-11           (Appeals), Kolkata
 
 Finance Act 1994          2007-08          Custom, Excise and Service 
                             to             Tax Appellate Tribunal, 
                            2011-12         Ahmedabad  Commissioner 
                                            (Appeals), Cental Excise, 
                                            Rajkot
 
 The Customs Act 1962     2004, 2005, 2007, Custom, Excise and Service Tax
                              2008, 2010    Appellate Tribunal, Ahmedabad..
 
 (x) The Company does not have accumulated losses more than 50% of the
 networth of the Company as at 31st March, 2014. The Company has
 incurred cash losses during the year under review, there was no cash 
 losses in the immediately preceding financial year.
 
 (xi) The Company has defaulted in repayment of dues to banks and
 financial institutions in respect of Letters of Credit, Buyer''s Credit,
 Bills Discounting, Term Loan Installments, NCD installments and 
 Interest. However during the year, the CDR proposal of the Company has 
 been approved by the CDR Empowered Group (CDR EG) at its meeting held 
 on 14th March 2014. As per approved CDR package, defaults during the 
 year with CDR lenders have been regularised, except the following 
 defaults which existing/continuing as on the Balance sheet date.
 
 Particulars   Delays up to  Delays 31  Delays 91 - Delays beyond  Total
                30 days       90 day    180 days     180 days     Amount
 
 Installments/ 
 Overdrawing      025          14.12       028            -        14.65
 
 Interest 
 liabilities      3.70          9.63       1.93          9.96      25.22
 
 (xii) According to the informations and explanations given to us, the
 
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund / nidhi / mutual benefit 
 fund / society.  Therefore, the provisions of clause (xiii) of paragraph 
 4 of the order are not applicable to the company.
 
 (xiv) According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other investments. The investments have been held by the company in its
 own name except to the extent of exemption, if any, granted under
 section 49 of the Companies Act, 1956.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions, on the basis of which the Company 
 has given guarantees for loans taken by the erstwhile subsidiary 
 companies from banks or financial institutions, are not as such prima 
 facie prejudicial to the interests of the Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us and on the basis of our examination of the books of
 account, the term loans were applied for the purpose for which such
 loans were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that no funds raised on short-term basis were used for long term
 investment.
 
 (xviii) The company, during the year, has allotted equity shares on
 preferential basis consequent upon conversion of Share warrants
 allotted to a company covered in Register maintained under Section 301
 of the Companies Act,1956. The Price at which these shares have been
 issued has been determined as per Securities and Exchange Board of
 India (Disclosure and Investor Protection) Guidelines 2000, which, in
 our opinion, is not prejudicial to the interest of the Company.
 
 (xix) The company has not issued any debentures or bonds during the
 year under review.
 
 (xx) The company has not raised any money by way of public issues
 during the year under review.
 
 (xxi) Based upon the audit procedures followed for the purpose of
 reporting on the true and fair view of the financial statements and as
 per the information and explanations given by management, no fraud on
 or by the Company has been noticed or reported during the year.
 
                                               For N.C.Banerjee & Co.
                                               Chartered Accountants
                                   (Firm''s Registration No. : 302081E)
 
                                                 A Paul
 Place : Kolkata                               (Partner)
 Dated : 25th May, 2014                 Membership No. 06490
Source : Dion Global Solutions Limited
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