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Auditor Report of A Infrastructure Ltd.

Mar 31, 2013

We have audited the accompanying financial statements of A Infrastructure Ltd. ("the Company"), which comprise the Balance Sheet as at 31st March , 2013, 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.

Management's Responsibility for the Financial Statements

The 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 referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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.

Auditors' 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 the 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 the 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the 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 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 31st March, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit 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 purposes 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 Balance Sheet, Statement of Profit and Loss, and the 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 the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

(e) On the basis of the written representations received from the directors as on 31st March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Fixed Assets have been physically verified by the Management during the year and no material discrepancies have been noted.

(c) In our opinion and according to information and explanations given to us, the Company has not disposed off substantial part of fixed assets during the year.

(ii) In respect of its inventories:

(a) The inventory has been physically verified by the management at the end of the year. 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 found reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to information and explanations given to us, the Company is maintaining proper records of its inventories. The discrepancies noticed on verification, where physical verification has taken place, between the physical stocks and book records which are not material in relation to the Company, have been properly dealt with in the books of accounts as informed to us.

(iii) In respect of unsecured loans:

(a) During the year, the Company has taken Unsecured Loans from the Companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956 as explained to us. Maximum amount involved during the year was Rs. 169.54 lakhs from 5 parties. Year-end balance from such parties was Rs. 116.16 lakhs. The rate of interest and other terms & conditions are not prejudicial to the interest of the Company.

(b) As explained and informed to us, the Company has given unsecured loans to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Maximum amount involved during the year was Rs. 1191.72 lakhs to 9 parties. Year-end balance from such parties was Rs. 345.04 lakhs. The terms and conditions are not prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has an adequate internal control procedure commensurate with its size and nature of its business, for the purchase of inventory, fixed assets and for purchase/sale of goods. During the course of our audit, we have not observed any major weakness in the internal control.

(v) In respect of the contracts or arrangement referred to in Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made during the year in pursuance of such contracts and arrangements exceeding value of Rupees five lakhs for each party, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time except for certain transactions for sale of materials of sub-standard quality.

(vi) The Company has not accepted any deposits from the public during the year, which covered under section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975.

(vii) in our opinion, the Company has an internal audit system, commensurate with the size and nature of its business. The coverage of Internal Audit should be enlarged.

(viii) The Company has maintained cost records relating to products of 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, as certified by their cost auditors and we have relied upon the same.

(ix) In respect of Statutory dues:

(a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Service Tax, Sales Tax, Wealth Tax, Custom Duty, Excise-Duty, Cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding, as at 31st March, 2013 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are statutory dues which have not been deposited on account of any dispute. (Please refer Annexure II)

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current and immediately preceding financial year. (xi) On the basis of examination of records and according to the information and explanations given to us, there has not been any delay in repayment of dues to the banks by the Company. At the year end, there were no overdoes in repayments to banks.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of securities by way of pledge of shares, debentures or other securities.

(xiii) In our opinion the Company is not a Chit/nidhi/mutual benefit funds/society, therefore the provisions of clause 4(xiii) of the CARO, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion and according to information and explanations given to us, the Company has given guarantee for loan taken by a corporate entity from a Bank. According to the information and explanation given to us, we are of the opinion that terms and conditions thereof are not prejudicial to the interest of the Company.

(xvi) On the basis of information and explanations provided to us, the term Loans have been applied for the purposes for which they were raised.

(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been generally used for long-term investment

(xviii) During the year, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) As the Company has not issued any debentures, paragraph 4(xix) of the Order is not applicable.

(xx) During the year, since the Company has not raised money by way of public issue, paragraph 4(xx) of the Order is not applicable.

(xxi) To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

ANNEXURE-II (Rs, in lacs)

Nature of Dues Amount Period TO WHICH The Authority where the amount relates dispute is pending

Works Contract Tax 34.60 2004-05 D.C.(Appeal), Ahmadabad

RST & CST 937.00 Dec.2003 March 2006 CESTAT, New Delhi Entry Tax 3.90 2006-07 D.C.(Appeal), Bhilwara

Entry Tax 2.48 2007-08 D.C.(Appeal), Bhilwara

Entry Tax 3.15 2008-09 D.C.(Appeal), Bhilwara

RST & CST 45.79 2007-08 Appeal against Final Assessment pending in Rajasthan Tax Board, Ajmer and Revision against Provisional Assessment pending in Rajasthan High Court, Jodhpur

RST & CST 9.82 2008-09 Appeal against Provisional Assessment pending in Rajasthan High Court, Jodhpur and Revision against Final Assessment pending in D.C.(Appeal), Bhilwara.

RST & CST 64.44 2009-10 Rajasthan High Court, Jodhpur

Income Tax 12.05 2009-10 CIT (Appeal), Ajmer

RVAT & CST 49.83 2010-10 Rajasthan Tax Board,Ajmer

Total 1163.06

* Net of tax deposted including the paynment which will be made before filling of the return of income



for AGIWAL & ASSOCIATES

Chartered Accountants

(FRN-000181N)

Place : New Delhi Sd/-

Date: 30-05-2013 (D.C.Maheshwari)

Partner

M. No. 009883


Mar 31, 2012

We have audited the attached Balance Sheet of A Infrastructure Ltd. as at 31st March, 2012 and also the Statement of Profit and Loss of the Company for the year ended on that date and Cash Flow Statement of the Company annexed thereto for the year ended on that date. These financial statements are the responsibility of the Company Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Department of Company Affaires in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 & 5 of the said Order, to the extent applicable to the Company.

2. Further to our comments in the annexure referred to in paragraph above, 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 Accounts as required by law have been kept by the Company, so far as appears from our examination of those books;

c) The Balance Sheet and the Statement of Profit & Loss dealt with by this report are in agreement with the Books of Accounts;

d) In our opinion, the Balance sheet and the Statement of Profit & Loss dealt with by this report comply with the accounting standards refer to in subsection (3C) of section 211 of the Companies Act, 1956

e) On the basis of written representations received from the directors as on 31s' March, 2012, and taken on record by the board of directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of subsection (1) of section of 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us read with Note no. 42 regarding income accrued from operations of manufacturing unit taken on lease from Gujarat Composite Limited. shown as operating income as explained in the above stated note and other notes thereon, the Accounts give the information required by the Companies Act, 1956, 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 31st March, 2012,

(ii) In the case of Statement of Profit and Loss , of the profit of the Company for the year ended on that date, and

(Hi) In the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Fixed Assets have been physically verified by the Management during the year and no material discrepancies have been noted.

(c) In our opinion and according to information and explanations given to us, the Company has not disposed off substantial part of fixed assets during the year.

(ii) In respect of its inventories:

(a) The inventory has been physically verified by the management at the end of the year. 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 found reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to information and explanations given to us, the Company is maintaining proper records of Its inventories. The discrepancies noticed on verification, where physical verification has taken place, between the physical stocks and book records which are not material in relation to the Company, have been properly dealt with in the books of accounts as informed to us.

(iii) In respect of unsecured loans:

(a) During the year, the Company has taken Unsecured Loans from the Companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956 as explained to us. Maximum amount involved during the year was Rs. 236.82 lakhs from 5 parties. Yearend balance from such parties was Rs. 113.15 lakhs. The rate of interest and other terms & conditions are not prejudicial to the interest of the Company.

(b) As explained and informed to us, the Company has given unsecured loans to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Maximum amount involved during the year was Rs. 444.80 lakhs to 7 parties. Yearend balance from such parties was Rs. 93.61 lakhs. The terms and conditions are not prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has an adequate internal control procedure commensurate with its size and nature of its business, for the purchase of inventory, fixed assets and for purchase/sale of goods. During the course of our audit, we have not observed any major weakness in the internal control.

(v) In respect of the contracts or arrangement referred to in Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made during the year in pursuance of such contracts and arrangements exceeding value of Rupees five lakhs for each party, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time except for certain transactions for sale of materials of sub-standard quality.

(vi) The Company has not accepted any deposits from the public during the year, which covered under section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975.

(vii) In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business. The coverage of Internal Audit should be enlarged.

(viii) We have broadly reviewed the cost records maintained by the Company relating to products of 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 made a detailed examination of the cost records with a view to determine whether they are accurate or complete,

(ix) In respect of Statutory dues:

(a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Service Tax, Sales Tax, Wealth Tax, Custom Duty, Excise-Duty, Cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable" in respect of aforesaid dues were outstanding, as at 31s1 March, 2012 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are statutory dues which have not been deposited on account of any dispute. (Please refer Annexure II)

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current and immediately preceding financial year.

(xi) On the basis of examination of records and according to the information and explanations given to us, there has not been any delay in repayment of dues to the banks by the Company. At the year end, there were no overdoes in repayments to banks.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of securities by way of pledge of shares, debentures or other securities.

(xiii) In our opinion the Company is not a Chit/nidhi/mutual benefit funds/society, therefore the provisions of clause 4(xiii) of the CARO, 2003 are not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company

(xv) In our opinion and according to information and explanations given to us, the Company has given guarantee for loan taken by a corporate entity from a Bank. According to the information and explanation given to us, we are of the opinion that terms and conditions thereof are not prejudicial to the interest of the Company.

(xvi) On the basis of information and explanations provided to us, the term Loans have been applied for the purposes for which they were raised.

(xvii) According to the information and explanation given to us and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have not been generally used for long-term investment.

(xviii) During the year the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) As the Company has not issued any debentures, paragraph 4(xix) of the Order is not applicable.

(xx) During the year, since the Company has not raised money by way of public issue, paragraph 4(xx) of the Order is not applicable.

(xxi) To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

ANNEXURE-II (Rs, in lacs)

Nature of Dues Amount Period TO WHICH The Authority where the amount relates dispute is pending

Works Contract Tax 34.60 2004-05 D.C.(Appeal), Ahmadabad

RST & CST 43.64 2005-06 D.C.(Appeal), Bhilwara Entry Tax 3.90 2006-07 D.C.(Appeal), Bhilwara

Entry Tax 2.48 2007-08 D.C.(Appeal), Bhilwara

Entry Tax 3.15 2008-09 D.C.(Appeal), Bhilwara

RST & CST 45.79 2007-08 Appeal against Final Assessment pending in Rajasthan Tax Board, Ajmer and Revision against Provisional Assessment pending in Rajasthan High Court, Jodhpur

RST & CST 9.82 2008-09 Appeal against Provisional Assessment pending in Rajasthan High Court, Jodhpur and Revision against Final Assessment pending in D.C.(Appeal), Bhilwara.

RST & CST 64.44 2009-10 Rajasthan High Court, Jodhpur

Income Tax 12.05 2009-10 CIT (Appeal), Ajmer

Total 219.87



For AGIWAL & ASSOCIATES

(FRN-000181N)

Chartered Accountants



(D.C.Maheshwari)

New Delhi, 20th August, 2012 Partner

M. No. 009883

 
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