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Independent Auditors' Report
To The Members of
Container Corporation of India Limited
Report On the Financial Statements
We have audited the accompanying Financial Statements of Container Corporation of India Limited ("the Company") which comprises the Balance Sheet as at 31 st 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 annexed thereto, in which are incorporated the accounts of eight regions audited by respective branch auditors appointed by the Comptroller and Auditor General of India, relied upon by us and the accounts of Corporate Office, New Delhi audited by us.
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 of 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 preparationand presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.
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.
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 the material misstatement of the financial statements, whether due to error or fraud. In making those risk assessments, the auditor considers internal 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 controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and 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 audit opinion on financial statements.
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:
i) In the case of balance sheet, of the state of affairs of the Company as at March 31,2015;
ii) In the case of statement of profit and loss, of the profit of the Company for the yearended on that date; and
iii) In the case of cash flow statement, of the cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the notes to the financial statements:
A) Note 6 (A) c and part xxvii of Notes to the financial statement which describes the Investment in the equity shares of subsidiary company Fresh & Healthy Enterprises Limited, has incurred net cash loss during the current year and previous year(s) and, said Company's current liabilities exceeded its current assets as on 31.03.2015. These conditions indicate the existence of material uncertainty that cast significant doubt about the company's ability to continue as going concern. FHEL has accumulated losses of Rs.114.36 crore as on 31.03.2015 against the CONCOR's investment of Rs.146.62 crore. No provisionfordiminution in value of investment is made.
B) Part f) of point no. xviii) of Notes to the financial statements which describes investment of Rs.54.60 crore in India Gateway Terminal (P) Ltd, No provision for diminution in value of investment is made.
Our opinion is not modified in these matters.
Report on Other Legal and Regulatory Requirements
1. 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 section 143 of the Act, we give in the Annexure –1 a statement on the matters specified in paragraphs 3 and 4 of the Order;
2. As required by section 143(3)of theAct, 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 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 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 31 March 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015, 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) Company has disclosed the impact of pending litigations in note 16(ii)(C) of financial statements as contingent liability of Rs.1387.68 crore.
ii) There are not any material foreseeable losses, on long term contracts, therefore the Company has not made any provision, required under the applicable laworaccounting standards.
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
3. As required by section 143(5) of the Act and sub–direction under the same issued by C &AG, we give in Annexure – II our report on such matters.
ANNEXURE –1 TO THE AUDIT REPORT TO THE CONTAINERCORPORATION OF INDIA LIMITED
Referred to in paragraph 1 of report on other legal and regulatory requirement's paragraph of our report on the financial statement for the year ended 31 st March 2015,
(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) As per the information and explanations given to us, fixed assets have been physically verified by the management during the year in a phased manner, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such physical verification were not material and the same have been properly dealt with in the books of account.
(ii) (a) The inventories of the Company consisting of stores and spare parts have been physically verified by the management during the year.
(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) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventories. As explained to us, the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.
(iii) The company has granted the following loans, unsecured, to companies in the register maintained under section 189 of the Companies Act, 2013.
a) Out of the Loan given to wholly owned subsidiary Fresh and Healthy Enterprises Ltd an amount of Rs.70 crore was converted into equity during the year. Interest due over it of Rs.9,90,61,707/– is outstanding as on 31.03.2015.; and
b) Reasonable steps have been taken by the company for recovery of the principal & interest.
(iv) According to the information and explanations given to us, there seems to be adequate internal control systems 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 services. The activities of the Company does not involve sale of goods. Further, on the basis of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of a continuing failure to correct major weaknesses in the aforesaid internal control system.
(v) The Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.
(vi) As informed to us, the Central Government has not prescribed maintenance of cost records under section 148(1) of the Companies Act, 2013.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund,employees'state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. Further, the undisputed amounts outstanding at the year–end for a period of more than six months from the date they became payable are given below:
(c) According to the information and explanation given to us the company has transferred an amount of Rs.1,02,399/– to 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 time.
(viii) The Company has neither accumulated losses as at the end of the financial year nor has incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.
(ix) According to the information and explanations given to us and as per the books and records examined by us, the company does not have any dues payable to any financial institutions, banks and debenture holders.
(x) The company has given guarantee/ bonds for joint ventures & subsidiaries of Rs.167.57 crore, the terms and conditions whereof are not prejudicial to the interest of the company;
(xi) In our opinion and on the basis of information and explanations given to us, the company has not raised any term loan during the financial year, hence the related reporting requirement of the Order are not applicable.
(xii) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, 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 KUMAR VIJAY GUPTA & CO.
Place: New Delhi
Date: 28th May, 2015