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.
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.
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
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
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
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
(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
(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
(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
(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
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
Name of the statute Nature of Dues Amount
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
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
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,
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
Overdrawing 025 14.12 028 - 14.65
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
(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.
(Firm''s Registration No. : 302081E)
Place : Kolkata (Partner)
Dated : 25th May, 2014 Membership No. 06490