To the Members of Moser Baer India Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Moser Baer India Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the fifteen months period from January 01, 2015 to March 31, 2016 (the "period") then ended, and a summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
2. 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 standalone 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; 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.
Auditor's Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. 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.
5. 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 standalone financial statements are free from material misstatement.
6. 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 controls 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.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 March 31, 2016, and its losses and its cash flows for the fifteen months period ended on that date.
Emphasis of Matter
9. We draw attention to note 48 to the financial statements. The Company has incurred a net loss of Rs. 7,036,474,934 for the fifteen months period ended March 31, 2016 and, as of that date, the Company's accumulated losses amounted to Rs.23,605,019,015 resulting in complete erosion of its net worth. Further, as of that date, the Company's current liabilities exceeded its current assets by Rs. 21,986,021,287. These conditions, along with matters set forth in note 48 indicate the existence of uncertainty that may cast significant doubt about the company's ability to continue as a going concern. Our opinion is not qualified in respect of this matter.
10. We draw attention to note 47 to the financial statements with respect to management's assessment of 'other than temporary' diminution in value of investments in and recover ability of advances/receivables from its subsidiaries companies amounting to Rs. 3,517,734,934 and Rs. 3,794,758,260 respectively (net of payables and provisions thereon). Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. As required by Section 143(3) of the Act, we 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 it appears from our examination of those books;
c. the standalone financial statements dealt with by this report are in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);
e. on the basis of the written representations received from the directors as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164(2) of the Act;
f. 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. as detailed in Note 32(b) to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of three financial years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management.
(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.
(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 between physical inventory and book records were noticed on physical verification.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a) and 3(iii)(b) of the Order are not applicable.
(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) The Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of Company's products. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.
(vii) (a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of the statute
|
Nature of dues
|
Amount (Rs.)
|
Amount Paid under protest (Rs.)
|
Period to which the amount relates
|
Forum where dispute is pending
|
Custom Duty
|
Custom duty
|
13,924,896
|
-
|
FY 2007-08
|
CESTAT, Chennai
|
Act, 1962
|
Custom duty
|
9,749,862
|
-
|
FY 2008-09
|
High Court of Allahabad
|
|
Custom duty
|
4,823,292
|
4,823,292
|
FY 2009-10 to 2011-12
|
CESTAT, New Delhi
|
Excise Duty Act, 1948
|
Excise duty
|
197,707,615
|
594,307
|
FY2006-07 FY 2011-12 FY 2012-13 FY 2013-14
|
CESTAT, New Delhi
|
|
Excise duty
|
1,111,795
|
7,220
|
FY 2011-12 to 2013-14
|
Assistant Commissioner Custom and Central Excise, Noida
|
|
Excise duty
|
566,581,606
|
24,470
|
FY 2007-08 to FY 2013-14
|
Commissioner Custom and Central Excise, Noida
|
|
Excise duty
|
9,601,232
|
356,530
|
FY 2006-07 FY 2011-12 FY 2012-13
|
Additional Commissioner Custom and Central Excise, Noida
|
Name of the statute
|
Nature of dues
|
Amount (Rs.)
|
Amount Paid under protest (Rs.)
|
Period to which the amount relates
|
Forum where dispute is pending
|
Finance Act, 1994
|
Service tax
|
288,254,463
|
2,953,470
|
FY 2003-04 to 2004-05, FY 2006-07 to 2012-13
|
Commissioner Custom and Central Excise, Noida
|
Service tax
|
5,440,788
|
-
|
FY 1999-00
|
Deputy Commissioner Customs and Central Excise, Noida
|
Service tax
|
10,316,085
|
-
|
FY 2008-09 to 2010-11
|
Additional Commissioner Custom and Central Excise, --Noida
|
Service tax
|
323,023,008
|
-
|
FY 2008-09 to 2011-13
|
Commissioner Service Tax, Delhi.
|
Service tax
|
16,855
|
-
|
FY 2008-09 FY 2009-10 to 2010-11
|
Assistant Commissioner, Noida
|
Entry Tax Act, 2009
|
Entry tax
|
120,161,327
|
7,050,841
|
FY 1999-00 to 2001-02
|
Supreme Court of India
|
Entry tax
|
2,930,424
|
1,465,308
|
FY 2003-04 to 2007-08
|
High Court, Allahabad
|
Entry tax
|
4,241,834
|
1,838,272
|
FY 2004-05 FY 200506 FY 2008-09
|
Commercial Tax Tribunal, Noida
|
Entry Tax
|
276,135
|
27,650
|
FY 2007-08
|
Deputy Commissioner, Raipur (Appeals)
|
Central Sales Tax Act, 1956
|
Sales tax
|
54,049,750
|
7,408,830
|
FY 2004-05 to 2006-07 FY 2008-09
|
Commercial Tax Tribunal, Noida
|
Sales tax
|
8,415,748
|
4,734,084
|
FY 2006-07 to 2012-13
|
Additional Commissioner, (Appeals)
|
U.P Trade Tax Act, 1948
|
Value added tax
|
5,364,113
|
3,094,774
|
FY 2006-07 to 2007-08
|
Commercial Tax Tribunal, Noida
|
Rajasthan Value Added Tax Act, 2003
|
Value Added Tax
|
1,229,714
|
77,200
|
FY 2011-12 FY 2012-13
|
Appellate Authority-I
|
U.P Value Added Tax Act, 2008
|
Value added tax
|
20,892,671
|
9,251,120
|
FY 2000-08 to 2008-09 FY 2012-13
|
Additional Commissioner, (Appeals)
|
Value added tax
|
34,435,162
|
800,000
|
FY 2008-09
|
Commercial Tax Tribunal, Noida
|
Kerala VAT Act, 2005
|
Value added tax
|
2,608,271
|
1,372,789
|
FY 2007-08 FY 2008-09
|
Commercial Tax Assistant Commissioner, Ernakulam
|
Chhattisgarh VAT Act, 2005
|
Value added tax
|
32,697
|
3,300
|
FY 2007-08
|
Deputy Commissioner Raipur (Appeals)
|
West Bengal VAT Act 2003
|
Value added tax
|
1,038,907
|
-
|
FY 2009-10
|
Joint Commissioner, West Bengal
|
Income Tax Act, 1961
|
Income tax
|
903,566,208
|
36,279,670
|
AY 2004-05 to AY 2010-11
|
Income Tax Appellate Tribunal
|
Notes:
(i) FY - Financial year
(ii) AY - Assessment year
(c) The Company has transferred the amount required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under within the specified time.
(viii) In our opinion, the Company's accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current and the immediately preceding financial year.
ix) There are no dues payable to debenture-holders. The Company has defaulted in repayment of dues to the banks and a financial institution as summarized below:
|
Due date
|
Amount of default(Rs.)
|
Default in days
|
Banks
|
30-Sep-13
|
410,220
|
640
|
|
31-Oct-13
|
2,802,740
|
609-882
|
|
30-Nov-13
|
2,740,517
|
852
|
|
31-Dec-13
|
2,980,806
|
447-821
|
|
31-Jan-14
|
7,219,821
|
454-790
|
|
28-Feb-14
|
23,111,939
|
388-762
|
|
31-Mar-14
|
44,933,089
|
288-731
|
|
30-Apr-14
|
29,759,832
|
327-701
|
|
31-May-14
|
74,938,392
|
296-670
|
|
30-Jun-14
|
152,791,342
|
266-640
|
|
31-Jul-14
|
52,627,286
|
235-609
|
|
31-Aug-14
|
212,290,865
|
204-578
|
|
30-Sep-14
|
168,871,259
|
113-548
|
|
31-Oct-14
|
77,323,647
|
82-517
|
|
30-Nov-14
|
411,828,329
|
52-487
|
|
30-Dec-14
|
20,327,302
|
10-456
|
|
31-Dec-14
|
192,160,405
|
21-456
|
|
31-Jan-15
|
92,727,929
|
1-425
|
|
28-Feb-15
|
448,281,262
|
1-397
|
|
31-Mar-15
|
211,516,945
|
1-366
|
|
30-Apr-15
|
90,359,240
|
1-336
|
|
31-May-15
|
419,770,033
|
1-305
|
|
30-Jun-15
|
90,352,985
|
1-275
|
|
31-Jul-15
|
93,473,155
|
21-244
|
|
31-Aug-15
|
419,624,437
|
1-213
|
|
30-Sep-15
|
90,384,105
|
50-183
|
|
31-Oct-15
|
93,169,552
|
59-152
|
|
30-Nov-15
|
415,884,791
|
1-122
|
|
31-Dec-15
|
92,845,741
|
91
|
|
31-Jan-16
|
92,886,536
|
60
|
|
29-Feb-16
|
411,419,825
|
1-31
|
|
31-Mar-16
|
92,780,532
|
-
|
Financial Institution
|
31-Jan-14
|
1,495,820
|
790
|
|
28-Feb-14
|
1,557,851
|
762
|
|
31-Mar-14
|
1,724,763
|
731
|
|
30-Apr-14
|
1,415,804
|
701
|
|
31-May-14
|
1,724,763
|
670
|
|
30-Jun-14
|
12,719,750
|
640
|
|
31-Jul-14
|
2,768,897
|
609
|
|
31-Aug-14
|
13,008,600
|
578
|
|
30-Sep-14
|
8,930,113
|
548
|
|
Due date
|
Amount of default(Rs.)
|
Default in days
|
|
31-Oct-14
|
4,408,920
|
517
|
|
30-Nov-14
|
22,812,627
|
487
|
|
31-Dec-14
|
9,358,180
|
456
|
|
31-Jan-15
|
4,418,445
|
425
|
|
28-Feb-15
|
22,527,567
|
397
|
|
31-Mar-15
|
9,358,180
|
366
|
|
30-Apr-15
|
4,275,914
|
336
|
|
31-May-15
|
23,035,915
|
305
|
|
30-Jun-15
|
4,275,914
|
275
|
|
31-Jul-15
|
4,418,445
|
244
|
|
31-Aug-15
|
23,035,915
|
213
|
|
30-Sep-15
|
4,275,914
|
183
|
|
31-Oct-15
|
4,418,445
|
152
|
|
30-Nov-15
|
22,893,384
|
122
|
|
31-Dec-15
|
4,418,445
|
91
|
|
31-Jan-16
|
4,418,445
|
60
|
|
29-Feb-16
|
22,750,855
|
31
|
|
31-Mar-16
|
4,418,445
|
-
|
(x) The Company has given a guarantee in respect of loans taken by subsidiaries from banks, in respect of which no commission is charged from the subsidiaries. In our opinion, having regard to the long term involvement with the subsidiary companies and considering the explanations given to us in this regard, the terms and conditions of the above are not, prima facie, prejudicial to the interests of the Company.
(xi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.
(xii) No fraud on or by the Company has been noticed or reported during the period covered by our audit
For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
per Neeraj Goel
Partner
Membership No.:099514
Place: New Delhi
Date: May 25, 2016
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