Mar 31, 2018
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of A2Z Infra Engineering Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Companyâs branches at Zambia, Uganda and Nepal.
Managementâs Responsibility for the Standalone Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs 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 thereunder.
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 these 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 auditorâs 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 Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 these 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 including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2018, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matters
9. We draw attention to;
a) Note 3.1 to the accompanying standalone financial statements, which describe the significant estimates and assumptions, including extension of the concession period, used by the management for determining recoverable amount of cogeneration power plants classified under property, plant and equipment and capital work-in-progress aggregating to Rs. 9,679.00 lacs and Rs. 18,027.12 lacs respectively as at 31 March 2018, with respect to the impairment assessment in accordance with the requirements of Ind AS 36, Impairment of Assets. Basis this valuation the management believes that no adjustment is required to the carrying value of the aforesaid cogeneration power plants.
b) Note 7.1 to the accompanying standalone financial statements, with respect to unbilled revenue relating to certain contracts which are still in progress aggregating to Rs. 8,381.36 lacs, recognised in the earlier years. Based on ongoing discussions/ negotiations with the customers, management believes that these amounts are completely billable.
c) Note 39 to the accompanying standalone financial statements, which describes the uncertainty relating to the outcome of litigation pertaining to income tax matters pursuant to orders received by the Company against which management and the assessing authorities have filed appeals with relevant Income Tax Authorities. The final outcome of these matters is presently unascertainable.
d) Note 21.1 to the accompanying standalone financial statements, which describes the uncertainty relating to utilisation of input tax credit and levy of interest on service tax. Based on the terms of the contract with the customers/ vendors and independent legal opinion, management believes that these amounts are recoverable from the customer including interest thereon and that the Company will be able to avail the input tax credit for aforementioned matter.
e) Note 5.2 to the accompanying standalone financial statements regarding the Companyâs non-current investment in its subsidiary company, and its other current financial assets (net of impairment) and its current financial assets-loan which include amounts dues from such subsidiary company as on that date aggregating Rs. 20,151.90 lacs, Rs. 410.73 lacs and Rs. 592.85 lacs, respectively. The consolidated net worth of the aforesaid subsidiary company as at 31 March 2018 has been fully eroded and has been incurring losses. Based on the future business plans and projections of the subsidiary company at consolidated level, which have been developed by the management using certain assumptions and estimates, as described in the aforementioned note, management believes that the realizable amount is higher than the carrying amount of such non-current investment, other current financial assets (net of impairment) and current financial assets -loan and hence fully recoverable.
Our opinion is not modified in respect of above matters.
Other Matters
10. We did not audit the separate financial statements of three branches located outside India, included in the accompanying statement of standalone financial statement, whose financial statements reflects total revenues (after eliminating intra-group transactions) of Rs. 7,609.44 lacs and net profit after tax of Rs. 84.54 lacs for the year ended 31 March 2018 and total assets of Rs. 5,415.20 lacs as at 31 March 2018, as considered in these standalone financial statements. These financial statements and other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries.
Our opinion in so far it relates to the amounts and disclosure in respect of these branches is solely based on report of the other auditors and the conversion adjustment prepared by the management of the Company, which have been audited by us. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. Further to our comments in Annexure I, 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;
(c) the reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;
(d) the standalone financial statements dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;
(e) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under Section 133 of the Act;
(f) the matters described in paragraph 9 under the Emphasis of Matters paragraph, in our opinion, may have an adverse effect on the functioning of the Company;
(g) on the basis of the written representations received from the directors as on 31 March 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;
(h) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 29 May 2018 as per Annexure II expressed an unqualified opinion;
(i) with respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. the Company, as detailed in Note 39 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position;
ii. the Company, as detailed in Note 38 to the standalone financial statements, has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts. The Company does not have any derivative contracts;
iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November, 2016 to 30 December, 2016 which are not relevant to these standalone financial statements. Hence, reporting under this Clause is not applicable.
Annexure I
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, and to the best of our knowledge and belief, 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 years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties which are included under the head âProperty, plant and equipmentâ are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.
(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Act and with respect to the same:
(a) in our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the companyâs interest;
(b) the schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayments/receipts of the principal amount and the interest are regular;
(c) in the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days and whether reasonable steps have been taken by the Company for the of principal amount and interest.
(iv) In our opinion, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees and security.
(v) In our opinion, 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) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Companyâs products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax (GST), cess and other material statutory dues, as applicable, have not been regularly deposited to the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:
Statement of arrears of statutory dues outstanding for more than six months
Name of the statute |
Nature of the dues |
Amount (INR lacs) |
Period to which the amount relates |
Due Date |
Date of payment |
Income Tax Act, 1961 |
Tax deducted at source |
573.43 |
March 2016 to August 2017 |
7th day of subsequent month |
Not yet paid |
Chapter V of Finance Act, 1994 |
Service tax |
5,513.25 |
March 2016 to June 2017 |
5th day of subsequent month (6th for online payment) |
Not yet paid |
Employees Provident Fund and Miscellaneous Provisions Act, 1952 |
Employee Provident fund |
53.42 |
November 2015 to August 2017 |
15th day of subsequent month |
Not yet paid |
Employee State Insurance Act, 1948 |
Employee State Insurance |
10.64 |
June 2016 to August 2017 |
21st day of subsequent month |
Not yet paid |
Employee Welfare Fund |
Employee welfare fund |
0.46 |
November 2016 to August 2017 |
25th day of subsequent month |
Not yet paid |
Madhya Pradesh State Tax on Professions, Trades, Callings and Employment Act, 1995 |
Professional Tax |
6.99 |
July 2012 to August 2017 |
10th day of subsequent month |
Not yet paid |
West Bengal State Tax on Professions, Trades, Callings and Employment Act, 1979 |
Professional Tax |
0.67 |
April 2015 to August 2017 |
21st day of subsequent month |
Not yet paid |
(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Statement of disputed dues
Name of the statute |
Nature of the dues |
Amount (in lacs) |
Amount Paid Under Protest (in lacs) |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Demand made under section 153A and 153B |
2,790.80 |
Assessment Years 2009-10 to 2013-14 |
Income Tax Appellate Tribunal, Delhi |
|
Bihar Value Added Tax, 2005 |
Value Added Tax |
1,644.31 |
125.00 |
2013-14 |
Commissioner, Commercial tax, Bihar |
Value Added Tax |
83.55 |
- |
2010-11 |
Assessing Officer Commercial Tax, Bihar |
|
Value Added Tax |
203.61 |
61.08 |
2012-13 |
Commissioner, Commercial tax, Bihar |
|
Jharkhand Value Added Tax, 2005 |
Value Added Tax |
138.46 |
58.24 |
2008-09 to 2011-12 |
Commissioner, Commercial tax, Ranchi, Jharkhand |
The West Bengal Value Added Tax, 2003 |
Value Added Tax |
653.11 |
50.00 |
2009-10 |
West Bengal Commercial Taxes Appellate & Revisional Board, Kolkata |
Value Added Tax |
1,019.40 |
175.00 |
2010-11 |
West Bengal Commercial Taxes Appellate & Revisional Board, Kolkata |
|
Central Sales Tax |
54.13 |
2010-11 |
West Bengal Commercial Taxes Appellate & Revisional Board, Kolkata |
||
Central Sales Tax |
229.16 |
- |
2011-12 |
Additional Commissioner (Appeals) Sales Tax |
Central Sales Tax |
2.07 |
- |
2014-15 |
Joint Commissioner (Appeal), Sales Tax |
|
Value Added Tax |
192.72 |
- |
2014-15 |
Joint Commissioner (Appeal), Sales Tax |
|
The Maharashtra Value Added Tax, 2002 |
Central Sales Tax |
17.92 |
- |
2011-12 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
Central Sales Tax |
131.42 |
- |
2007-08 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
Value Added Tax |
1,801.79 |
- |
2008-09 |
Maharashtra Sales Tax Tribunal |
|
Value Added Tax |
15.52 |
- |
2009-10 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
Central Sales Tax |
154.06 |
- |
2009-10 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
Value Added Tax |
22.88 |
- |
2010-11 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
Central Sales Tax |
225.99 |
- |
2010-11 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
Central Sales Tax |
19.88 |
- |
2012-13 |
Sales Tax Tribunal, Mumbai, Maharashtra- Appeal |
|
Value Added Tax |
29.10 |
- |
2012-13 |
Sales Tax Tribunal, Mumbai, Maharashtra- Appeal |
|
Andhra Pradesh Value Added Tax Act, 2005 |
Value Added Tax |
62.95 |
31.25 |
2010-11 |
Andhra Pradesh Sales Tax and VAT Appellate Tribunal, Hyderabad |
Jammu and Kashmir Value Added Tax Act, 2005 |
Central Sales Tax |
64.66 |
- |
2013-14 |
Deputy Commissioner (Appeals) Sales tax |
Central Sales Tax |
86.02 |
- |
2012-13 |
Deputy Commissioner (Appeals) Sales tax |
|
The Madhya Pradesh VAT Act, 2002 |
Central Sales Tax |
3.25 |
- |
2013-14 |
Joint Commissioner, Indore, M.P-Appeal filed |
Central Sales Tax |
103.05 |
45.34 |
2011-12 |
Sales Tax Tribunal, Madhya Pradesh |
|
Haryana VAT Act, 2003 |
Central Sales Tax |
1,930.50 |
- |
2009-10 |
Sales Tax Revisional Authority, Gurgaon |
Kerala VAT Act, 2003 |
Central Sales Tax |
219.38 |
- |
2011-12 |
Honâble High Court of Kerala, Ernakulam |
(viii) There are no dues payable to debenture-holders or Government. The Company has defaulted in repayment of loans and borrowings to the following banks and financial institutions during the year, which is detailed below:
(Amount in lacs)
Particulars |
Default (in months) |
|||
Banks |
(0-3) |
(3-6) |
(6-12) |
(More than 12) |
Allahabad Bank |
523.39 |
9.21 |
- |
- |
Axis Bank |
497.48 |
65.28 |
3.86 |
2.15 |
DBS Bank |
234.94 |
157.77 |
544.57 |
8,648.62 |
ICICI Bank* |
761.48 |
282.25 |
1,891.01 |
4,266.29 |
HSBC bank |
31.09 |
20.55 |
68.90 |
417.87 |
IDBI Bank |
391.90 |
131.87 |
30.45 |
- |
Banks |
(0-3) |
(3-6) |
(6-12) |
(More than 12) |
Indusind Bank |
160.81 |
13.17 |
- |
- |
Kotak Mahindra Bank |
434.84 |
- |
- |
- |
State Bank of Hyderabad |
76.66 |
40.53 |
175.88 |
452.85 |
State Bank of Mysore |
89.95 |
42.30 |
210.56 |
191.20 |
State Bank of Patiala |
742.31 |
314.47 |
1,803.79 |
765.98 |
State Bank of Travancore |
96.74 |
44.37 |
229.30 |
104.89 |
Standard Chartered Bank |
325.85 |
321.54 |
626.38 |
3,867.49 |
State Bank of India |
255.18 |
121.91 |
643.22 |
1,701.46 |
Union Bank of India |
290.77 |
15.97 |
0.65 |
- |
Yes Bank |
362.57 |
370.43 |
1,139.26 |
1,655.61 |
Financial Institutions: |
||||
SICOM |
189.04 |
186.99 |
373.97 |
751.54 |
*During the previous year ICICI bank has transferred/assigned its fund based outstanding amount recoverable in favour of Edelweiss Assets Reconstruction Company Limited.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion term loans were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act except for in following cases:
(Amount in lacs)
S. No |
Payment made to |
Financial year |
Amount Paid/ provided in excess of limits prescribed (Rs) |
Amount due for Recovery as at March 31,2018 (Rs) |
Steps taken to secure the recovery of the amount |
Remarks (if any) |
1 |
Managing Director |
2012-13 |
94.54 |
29.99 |
The Company has obtained a declaration from the Managing Director that such amount has been held in trust and will be repaid as per agreed plan. |
Amount recoverable pertains to non-grant of requisite approval by Central Government under the provision of 198, 309 & 310 of erstwhile Companies Act 1956. |
2013-14 |
94.94 |
94.94 |
(xii) In our opinion, the Company is not a Nidhi Company Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.
(xiv)During the year, the Company has made preferential allotment/ private placement of shares. In respect of the same, in our opinion, the Company has complied with the requirement of Section 42 of the Act and the Rules framed thereunder. Further, in our opinion, the amounts so raised have been used for the purposes for which the funds were raised. During the year, the Company did not make preferential allotment/ private placement of convertible debentures.
(xv) In our opinion, the Company has not entered into any noncash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi)The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure II
Independent Auditorâs Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. In conjunction with our audit of the standalone financial statements of A2Z Infra Engineering Limited (âthe Companyâ) as at and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (âIFCoFRâ) of the Company as at that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs Board of Directors is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Companyâs business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on the Companyâs IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (âICAIâ) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (âthe Guidance Noteâ) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A companyâs IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2018, based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ.
For Walker Chandiok & Co LLP
Chartered Accountants
Firmâs Registration No.: 001076N/N500013
Sd/-
per Neeraj Sharma
Place : Gurugram Partner
Date : 29 May 2018 Membership No.: 502103
Mar 31, 2016
To
The Members of
A2Z Infra Engineering Limited
(formerly known as âA2Z Maintenance & Engineering
Services Limitedâ)
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of A2Z Infra Engineering Limited (formerly known as âA2Z Maintenance & Engineering Services Limitedâ) (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016 the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Company''s branches at Zambia and Uganda.
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 (âthe Actâ) 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. 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 loss and its cash flows for the year ended on that date.
Emphasis of Matters
9. We draw attention to:
(i) Note 14.1 to the standalone financial statements which describes the uncertainty relating to the assumptions used by management with respect to the impairment assessment of the cogeneration power plants and availability of the extension in the concession period for an additional term.
(ii) Note 23.1 to the standalone financial statements with respect to unbilled receivables relating to certain contracts which are still in progress aggregating to Rs. 1,204,118,263, recognized in the earlier years. Management, based on ongoing discussions/ negotiations with the customers believes that these amounts are completely billable and accordingly, no adjustments have been made in the standalone financial statements.
(iii) Note 33(a) to the standalone financial statements which describes the uncertainty relating to the outcome of litigation pertaining to income tax matters pursuant to assessment orders received by the Company for the assessment years 2009-10 to 2013-14 against which management has filed appeals with Income Tax Appellate Tribunal (ITAT). Pending the final outcome of these matters, which is presently unascertainable, no further adjustments have been made in the standalone financial statements.
Our opinion is not modified in respect of above matters.
Other Matter
10. We did not audit the financial statements of certain branches, included in these financial statements, whose financial statements reflect total revenues (after eliminating intergroup transactions) of Rs. 188,490,086 and net loss after tax and prior period items (after eliminating intra-group eliminations) of Rs. 19,718,647 for the year ended March 31, 2016 and total assets of Rs. 197,334,549 as at March 31, 2016. These financial statements and other financial information have been audited by other auditors whose audit reports have been furnished to us, and our opinion in respect thereof is based solely on the audit reports of such other auditors. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. Further to our comments in Annexure I, as required by Section143(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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;
c. the reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;
d. the standalone financial statements dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;
e. 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);
f. the matters described in paragraph 9 under the Emphasis of Matters paragraph, in our opinion, may have an adverse effect on the functioning of the Company;
g. 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 Section164(2) of the Act;
h. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated May 28, 2016 as per annexure II expressed an unqualified opinion.
i. 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 33 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;
ii. the Company, as detailed in Note 34 to the standalone financial statements, has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. The Company did not have any derivative contracts;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
Annexure I
Annexure I to the Independent Auditor''s Report of even date to the members of A2Z Infra Engineering Limited (formerly known as âA2Z Maintenance & Engineering Services Limitedâ), on the standalone financial statements for the year ended March 31, 2016
Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone 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, and to the best of our knowledge and belief, 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 3 years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.
(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Act; and with respect to the same:
(a) in our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the Company''s interest.
(b) the schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayments/receipts of the principal amount and the interest are regular;
(c) in the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest.
(iv) In our opinion, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees, and security.
(v) In our opinion, 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) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under subsection (1) of Section 148 of the Act in respect of Company''s products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited to the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:
Statement of arrears of statutory dues outstanding for more than six months
Name of the statute |
Nature of the dues |
Amount (Rs.) |
Period to which the amount relates |
Due date |
Date of payment |
Employee Welfare Fund Payable |
Employee welfare fund |
63,507 |
March 2015 to August 2015 |
25th day of subsequent month |
Not yet paid |
Madhya Pradesh Professional Tax Act, 1995 |
Professional tax |
568,957 |
July 2012 to August 2015 |
10th day of subsequent month |
Not yet paid |
West Bengal State Tax on Professions, Trades, Callings and Employments Act,1979 |
Professional tax |
31,750 |
March 2015 to August 2015 |
21st day of subsequent month |
Not yet paid |
(b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Statement of Disputed Dues
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 |
Income Tax Act, 1961 |
Demand made under section 153A & 153B |
199,216,987 |
- |
AY-2009-10 to 2013-14 |
Income Tax Appellate Tribunal, Delhi |
Bihar Value Added Tax Act, 2005 |
Bihar Value Added Tax |
8,354,879 |
- |
2010-11 |
Assessing Officer Commercial tax, Bihar |
Bihar Value Added Tax |
43,198,065 |
- |
2012-13 |
Honorable High Court, Patna |
|
Jharkhand Value Added Tax Act, 2005 |
Jharkhand Value Added Tax |
13,845,739 |
5,823,531 |
2008-09 to 2011-12 |
Commissioner Commercial tax, Ranchi, Jharkhand |
The West Bengal Value Added Tax Act, 2003 |
Works Contract Tax |
65,310,875 |
5,000,000 |
2009-10 |
West Bengal Commercial Taxes Appellate & Provisional Board, Kolkata |
West Bengal Value Added Tax |
101,939,698 |
17,500,000 |
2010-11 |
West Bengal Commercial Taxes Appellate & Provisional Board, Kolkata |
|
Central Sales Tax |
5,412,848 |
2010-11 |
West Bengal Commercial Taxes Appellate & Provisional Board, Kolkata |
||
West Bengal Central Sales Tax |
22,915,835 |
- |
2011-12 |
Additional Commissioner (Appeals) Sales Tax |
|
The Maharashtra Value Added Tax Act, 2002 |
Central Sales Tax |
13,142,012 |
- |
2007-08 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
Maharashtra Value Added Tax |
180,178,725 |
- |
2008-09 |
Maharashtra Sales Tax Tribunal |
|
Maharashtra Value Added Tax |
1,552,490 |
- |
2009-10 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
Central Sales Tax |
15,406,040 |
- |
2009-10 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
Maharashtra Value Added Tax |
2,287,862 |
- |
2010-11 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
Central Sales Tax |
22,598,631 |
- |
2010-11 |
Joint Commissioner (Appeal), Mumbai, Maharashtra |
|
AP Value Added Tax Act, 2005 |
Andhra Pradesh Value Added Tax |
6,294,726 |
3,125,000 |
2010-11 |
AP Sales Tax and VAT Appellate Tribunal, Hyderabad |
Jammu and Kashmir, Value Added Tax Act, 2005 |
J&K Value Added Tax |
8,602,146 |
2012-13 |
Deputy Commissioner Commercial Taxes (Appeals), Jammu |
|
The Madhya Pradesh VAT Act, 2002 |
Central Sales Tax |
10,304,904 |
4,533,692 |
2011-12 |
Commercial Tax Tribunal, Madhya Pradesh |
Central Sales Tax |
8,995,531 |
910,000 |
2012-13 |
Joint Commissioner, Indore, Madhya Pradesh |
|
Entry Tax |
331,785 |
207,289 |
2012-13 |
Joint Commissioner, Indore, Madhya Pradesh |
|
The Delhi Value Added Tax Act, 2004 |
Value Added Tax |
5,226,423 |
- |
2010-11 |
Joint Commissioner, Delhi |
Value Added Tax |
6,050,200 |
- |
2010-11 |
Joint Commissioner, Delhi |
|
Haryana VAT Act |
Central Sales Tax |
193,049,921 |
- |
2009-10 |
Sales Tax Tribunal,Chandigarh |
(viii)There are no dues payable to debenture-holders or Government. The Company has defaulted in repayment of loans and borrowings to the following banks and financial institutions during the year, which is detailed below:
Particulars |
Default (in months) |
||||
Banks |
(0-3) |
(3-6) |
(6-12) |
(12-24) |
(More than 24) |
Allahabad Bank |
30,017,247 |
5,256,179 |
3,494,820 |
- |
- |
Axis Bank |
26,261,734 |
1,903,620 |
450,248 |
- |
- |
HSBC Bank |
1,638,944 |
2,450,359 |
5,417,447 |
17,219,050 |
4,387,824 |
ICICI Bank |
74,389,999 |
80,658,721 |
104,674,246 |
- |
- |
IDBI Bank |
142,607,532 |
3,061,240 |
- |
- |
- |
Yes Bank |
252,768,059 |
1,060,822 |
- |
- |
- |
DBS Bank |
14,432,674 |
21,958,308 |
49,988,207 |
635,262,668 |
52,803,234 |
State Chartered Bank |
18,159,951 |
27,144,594 |
61,145,483 |
92,426,216 |
66,862,065 |
Indusind Bank |
15,247,457 |
683,687 |
231,549 |
- |
- |
ING Vyasa Bank |
27,544,465 |
1,748,809 |
2,854,626 |
- |
- |
State Bank of Patiala |
188,659,853 |
- |
- |
- |
- |
State Bank of Hyderabad |
3,082,797 |
4,712,268 |
11,338,046 |
3,745,795 |
- |
State Bank of India |
10,529,282 |
16,369,357 |
39,401,177 |
21,668,510 |
1,944,454 |
State Bank of Mysore |
16,683,893 |
1,951,059 |
- |
- |
- |
State Bank of Travancore |
21,674,986 |
1,023,883 |
154,750 |
- |
- |
Union Bank of India |
20,574,628 |
2,930,690 |
71,185 |
- |
- |
Financial Institutions: |
|||||
SREI Equipment Finance Limited |
289,559 |
436,941 |
1,059,420 |
1,917,290 |
15,037,051 |
State Industrial & Investment corporation of Maharashtra Limited (SICOM) |
12,295,082 |
18,904,110 |
43,869,863 |
75,000,000 |
571,023,460 |
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid by the companying accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act except for in following cases:
S. No |
Payment made to |
Financial year |
Amount Paid/ provided in excess of limits prescribed (Rs) |
Amount due for Recovery as at March 31, 2016 (Rs) |
Steps taken to secure the recovery of the amount |
Remarks (if any) |
1 |
Managing Director |
2012-13 |
9,453,744 |
8,453,744 |
The Company has obtained a confirmation from the Managing Director that such amount has been held in trust will be repaid as per agreed plan. |
Amount recoverable pertains to non-grant of requisite approval by Central Government under the provision of 198, 309 & 310 of erstwhile Companies Act 1956. |
2013-14 |
9,494,496 |
9,494,496 |
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3 (xii) of the Order are not applicable.
(xiii)In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
(xiv)During the year, the Company has made preferential allotment/ private placement of shares. In respect of the same, in our opinion, the Company has complied with the requirement of Section 42 of the Act and the Rules framed there under. Further, in our opinion, the amounts so raised have been used for the purposes for which the funds were raised. During the year, the Company did not make preferential allotment/ private placement of convertible debentures
(xv) In our opinion, the Company has not entered into any noncash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure II to the Independent Auditor''s Report of even date to the members of A2Z Infra Engineering Limited(formerly known as âA2Z Maintenance & Engineering Services Limitedâ), on the standalone financial statements for the year ended March 31, 2016
Annexure II
Independent Auditor''s report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. In conjunction with our audit of the standalone financial statements of A2Z Infra Engineering Limited (formerly known as âA2Z Maintenance & Engineering Services Limitedâ) (âthe Companyâ) as of and for the year ended March 31, 2016, we have audited the internal financial controls over financial reporting (IFCoFR) of the Company of as of that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s Board of Directors is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the company''s business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on the Company''s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s IFCoFR.
Meaning of Internal Financial Controls over Financial
Reporting
6. A company''s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s IFCoFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016 based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ.
For Walker Chandiok & Co LLP
(formerly Walker, Chandiok & Co)
Chartered Accountants
Firm''s Registration No.: 001076N/N500013
Sd/-
per Neeraj Sharma
Place: Gurgaon Partner
Date : May 28, 2016 Membership No.: 502103
Mar 31, 2015
1. We have audited the accompanying standalone financial statements of
A2Z Infra Engineering Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information, in
which are incorporated the returns for the year ended on that date
audited by the branch auditors of the Company's branches at Zambia and
Uganda.
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, 2015, and its loss and its cash
flows for the year ended on that date.
Emphasis of Matters
9. We draw attention to
a. Note 14.2 to the standalone financial statements which describes
the uncertainty relating to the assumptions used by management with
respect to the impairment assessment of the cogeneration power plants
and the extension of the concession period for an additional term as
per the conditions stipulated in the agreement.
b. Note 23.2 to the standalone financial statements with respect to
Contract revenue in excess of billing relating to certain contracts
which are still in progress aggregating to Rs. 1,966,500,958,
recognized in the earlier years. Management, based on ongoing
discussions/ negotiations with the customers believes that these
amounts are billable and accordingly no adjustments have been made in
the standalone financial statements.
c. Note 33(a) to the standalone financial statements which describes
the uncertainty relating to the outcome of litigations pertaining to
income tax matters pursuant to assessment orders received by the
Company for the Assessment years 2009-10 to 2013-14 against which
management has filed appeals with Commissioner of Income Tax (CIT)
(Appeals). Pending the final outcome of these matters, which is
presently unascertainable, no adjustments have been made in the
standalone financial statements.
Our opinion is not modified in respect of above matters.
Other Matter
10. We did not audit the financial statements of certain branches,
included in these financial statements, whose financial statements
reflect total assets (after eliminating intra-group transactions) of
Rs. 249,465,383 as at March 31, 2015; as well as the total revenue
(after eliminating intra-group transactions) of Rs. 346,304,088 for the
year ended March 31, 2015. These financial statements and other
financial information have been audited by other auditors whose audit
reports have been furnished to us, and our opinion in respect thereof
is based solely on the audit reports of such other auditors. Our
opinion is not modified 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 and proper returns adequate for the purposes of our audit
have been received from the branches not visited by us;
c. the reports on the accounts of the branch offices of the Company
audited under Section 143(8) of the Act by the branch auditors have
been sent to us and have been properly dealt with by us in preparing
this report;
d. the standalone financial statements dealt with by this report are
in agreement with the books of account and with the returns received
from the branches not visited by us;
e. 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);
f. on the basis of the written representations received from the
directors as on March 31, 2015 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164(2) of the
Act;
g. 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 33(a) to the standalone financial statements,
the Company has disclosed the impact of pending litigations on its
standalone financial position;
ii. the Company, as detailed in Note 34.1 to the standalone financial
statements, has made provision, as required under the applicable law or
accounting standards, for material foreseeable losses, if any, on
long-term contracts. The Company does not have any derivative
contracts.
iii. there were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure to the Independent Auditor's Report of even date to the
members of A2Z Infra Engineering Limited (formerly known as A2Z
Maintenance & Engineering Services Limited) on the financial statements
for the year ended March 31, 2015
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 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.
(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 granted unsecured loans to companies/ firms/
other parties covered in the register maintained under Section 189 of
the Act; and with respect to the same:
(a) the principal amounts and interest thereon are repayable on demand
and since the repayment of such loans has not been demanded, in our
opinion, receipt of the principal amount and interest is regular; and
(b) in the absence of stipulated terms and conditions, we are unable to
comment as to whether there is any overdue amount in excess of Rs. one
lakh and whether reasonable steps have been taken by the Company for
recovery of the principal amount and interest.
(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) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under sub- section (1) of Section 148 of
the Act in respect of Company's products / services and are of the
opinion that, prima facie, the prescribed accounts and records have
been made and maintained. However, we have not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
(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 not been regularly
deposited with the appropriate authorities and there have been
significant delays in a large number of cases. Undisputed amounts
payable in respect thereof, which were outstanding at the year-end for
a period of more than six months from the date they became payable are
as follows:
Name of the statute Nature of the dues Amount Period to
(Rs.) which the
amount
relates
Employees' State Employee State 318,652 August, 2014
Insurance Act, 1948 Insurance
Employees Provident Provident Fund 2,788,147 December, 2013
Funds and to August, 2014
Miscellaneous
Provisions Act, 1952
The Maharashtra State Professional Tax 16,450 June, 2012
Tax on Professions,
Trades, Callings and
Employments Acts,
1975.
Madhya Pradesh Professional Tax 455,605 July 2012
Professional Tax August 2014
Act, 1995
West Bengal State Professional Tax 9,916 December,2012
Tax on Professions,
Trades, Callings
and Employments
Act, 1979
Orissa State Tax on Professional Tax 1,700 March, 2013
Professions, Trades,
Callings And
Employments Act,
2000
Name of the Statute Due date Date of payment
Employees' State
Insurance Act, 1948 September Not yet paid
21, 2014
Employees Provident
Funds and
Miscellaneous
Provisions Act, 1952 20th day of Not yet paid
subsequent
month
The Maharashtra State July 11.2012 Not yet Paid
Tax on Professions,
Trades, Callings and
Employments Acts,
1975.
Madhya Pradesh 10th day of Not yet Paid
Professional Tax subsequent
Act, 1995 month
West Bengal State January 21,2013 Not yet Paid
Tax on Professions,
Trades, Callings
and Employments
Act, 1979
Orissa State Tax on April 30,2013 Not yet Paid
Professions, Trades,
Callings And
Employments Act,
2000
(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 Amount Paid
(Rs.) Under Protest
(Rs.)
Income Tax Act, 1961 Demand made under 199,216,987 -
section 153A & 153B
Bihar Value Added Bihar Value Added 8,354,879 -
Tax Act, 2005 Tax
Bihar Value Added 43,198,065 -
Tax
Jharkhand Value Jharkhand Value 10,650,909 5,823,531
Added Tax Act, 2005 Added Tax
The West Bengal Value Works Contract Tax 65,310,875 5,000,000
Added Tax Act, 2003
West Bengal Value 101,939,698 17,500,000
Added Tax
Central Sales Tax 5,412,848 -
West Bengal Value 22,915,835 -
Added Tax
The Maharashtra
Value Central Sales Tax 13,142,012 -
Added Tax Act, 2002
Maharashtra Value 180,178,725 -
added Tax
Maharashtra Value 1,552,490 -
added Tax
Central Sales Tax 15,406,040 -
Maharashtra Value 2,287,862 -
added Tax
Central Sales Tax 22,598,531 -
AP Value Added Tax Andhra Pradesh Value 6,294,726 3,125,000
Act, 2005 added Tax
Delhi Value Added Tax Delhi Value Added Tax 11,376,623 -
Act, 2004
The Madhya Pradesh Central Sales Tax 12,297,119 3,073,692
VAT Act, 2002
Central Sales Tax 8,995,531 -
Entry Tax 331,785 -
The Kerala Value Central Sales Tax 20,333,461 -
Added Tax Act, 2003
Kerala Value Added 1,077,141 -
Tax
Central Sales Tax 2,737,029 -
Name of the Statute Period to Forum where dispute
which the is pending
amount
relates
Income Tax Act, 1961 AY-2009-10 Commissioner of Income Tax
to 2013-14 (Appeals)-3, Gurgaon
Bihar Value Added 2010-11 Assessing Officer Commercial
Tax Act,2005 tax, Bihar
2012-13 Honorable High Court, Patna
Jharkhand Value 2008-09 Remanded back to assessing
Added Tax Act,2005 to 2011-12 authority, by Commissioner
Commercial tax, Ranchi,
Jharkhand
The West Bengal Value 2009-10 West Bengal Commercial
Added Tax Act, 2003 Taxes Appellate & Provisional
Board, Kolkata
2010-11 Joint Commissioner (Appeals),
Sales tax
2010-11 Joint Commissioner (Appeals),
Sales tax
2011-12 Additional Commissioner of
Commercial tax (Appeals)
The Maharashtra Value 2007-08 Company is in the process of
Added Tax Act,2002 filing appeal with the Joint
Commissioner (Appeal), Mumbai,
Maharashtra against the demand.
Time limit for filing such
appeal has not yet expired.
2008-09 Maharashtra Sales Tax Tribunal
2009-10 Joint Commissioner (Appeal),
Mumbai, Maharashtra
2009-10 Joint Commissioner (Appeal),
Mumbai, Maharashtra
2010-11 Joint Commissioner (Appeal),
Mumbai, Maharashtra
2010-11 Joint Commissioner (Appeal),
Mumbai, Maharashtra
AP Value Added Tax 2010-11 AP Sales Tax and VAT
Act,2005 Appellate Tribunal, Hyderabad
Delhi Value Added Tax 2010-11 Special commissioner-II, Delhi
Act,2004
The Madhya Pradesh 2011-12 Additional Commissioner (Appeal),
VAT Act,2002 Indore, Madhya Pradesh
2012-13 Company is in the process of
filing appeal with the Joint
Commissioner, Indore, Madhya
Pradesh against the demand.
Time limit for filing such
appeal has not yet expired.
2012-13 Company is in the process of
filing appeal with the Joint
Commissioner, Indore, Madhya
Pradesh against the demand.
Time limit for filling such
appeal has not yet expired.
The Kerala Value 2010-11 Deputy Commissioner, Kochi, Kerala
Added Tax ACT,2013
2010-11 Deputy Commissioner, Kochi, Kerala
2009-10 Deputy Commissioner, Kochi, Kerala
(c) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company in accordance
with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
rules made there under. Accordingly, the provisions of clause
3(vii)(c) of the Order are not applicable.
(viii)In our opinion, the Company has no accumulated losses at the end
of the financial year. 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 financial institutions
as summarized below:
Banks
Due date Amount of Default (Rs.) Default in days
January 31, 2013 175,484 516 - 608
February 3, 2013 8,150,709 786
February 28, 2013 256,200 471 - 580
March 31, 2013 377,517 440 - 549
April 30, 2013 5,731,392 410 - 700
May 31, 2013 6,385,780 379 - 669
June 13, 2013 50,000,000 656
June 30, 2013 6,594,424 349 - 639
July 31, 2013 10,739,919 318 - 608
August 31, 2013 14,695,361 287 - 577
September 13, 2013 50,000,000 564
September 30, 2013 14,433,965 257 - 547
October 31, 2013 15,716,028 226 - 516
November 30, 2013 15,355,468 196 - 486
December 13, 2013 50,000,000 473
December 31, 2013 16,048,404 287 - 455
January 31, 2014 16,167,140 256 - 424
February 28, 2014 15,052,520 228 - 396
March 13, 2014 50,000,000 383
March 31, 2014 23,749,371 197 - 365
April 30, 2014 21,897,646 2 - 335
May 31, 2014 23,261,309 2 - 304
June 30, 2014 29,670,127 1 - 274
July 31, 2014 29,886,167 1 - 243
August 31, 2014 29,944,445 1 - 212
September 30, 2014 27,707,531 1 - 182
October 31, 2014 44,250,756 1 - 151
November 30, 2014 42,394,923 1 - 121
December 31, 2014 44,064,499 1 - 90
January 31, 2015 81,331,144 21 - 59
February 28, 2015 102,406,559 19 - 31
Financial institutions
Due date Amount of default Default in days
April 30, 2013 4,176,525 700
May 31, 2013 6,577,723 669
June 28, 2013 500,000,000 641
June 30, 2013 6,298,256 639
July 15, 2013 6,674,922 624
July 31, 2013 6,510,669 608
August 31, 2013 8,670,351 577
September 30, 2013 8,524,117 547
October 15, 2013 6,874,963 532
October 31, 2013 6,516,332 516
November 30, 2013 6,309,163 486
December 31, 2013 6,519,469 455
January 31, 2014 6,519,469 424
February 28, 2014 5,888,552 396
March 31, 2014 6,534,283 365
April 30, 2014 6,325,611 335
May 31, 2014 6,535,619 304
June 30, 2014 6,324,175 274
July 31, 2014 6,534,538 243
August 31, 2014 6,533,781 212
September 30, 2014 6,321,848 182
October 31, 2014 6,531,696 151
November 30, 2014 6,320,202 121
December 31, 2014 6,530,039 90
January 31, 2015 6,529,199 59
February 28, 2015 5,896,298 31
(x) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xi) In our opinion, the Company has applied the term loans for the
purpose for which these loans were obtained.
(xii) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year, except for certain thefts of materials amounting to Rs.
11,833,071, identified by management during the year as explained in
Note No. 23.1 to the financial statements. The Company has filed FIRs
in this reference and has also submitted claims for the aforesaid
amount with the insurance company.
For Walker Chandiok & Co LLP
(formerly Walker, Chandiok & Co)
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Sd/-
per Neeraj Sharma
Place:Gurgaon Partner
Date :May 26, 2015 Membership No.: 502103
Mar 31, 2014
1. We have audited the accompanying financial statements of A2Z
Maintenance & Engineering Services 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
2. 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 principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 ("the Act")
read with the General Circular 15/2013 dated September 13, 2013 of the
Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. 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
3. 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.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' 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 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.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Basis for Qualified Opinion
6. As detailed in note 31 to the financial statement, the Company
continues to carry deferred tax assets of Rs. 396,071,991 on items
comprising unabsorbed losses and other timing differences between the
accounting and taxable income, which, in view of the management, shall
be realized on generation of taxable income in future years. However,
in the absence of virtual certainty supported by convincing evidence of
availability of sufficient future taxable income, recognition of
deferred tax assets, in our opinion, is not consistent with the
accounting principles as laid down under Accounting Standard 22,
"Accounting for Taxes on Income" as notified under the Companies
(Accounting Standards) Rules 2006. Had the Company reversed these
deferred tax assets, the loss after tax for the year ended March 31,
2014 would have been higher and reserves and surplus as at March 31,
2014 would have been lower by Rs. 396,071,991, and deferred tax assets
as at March 31, 2014 would have been lower by the same amount.
Qualified Opinion
7. In our opinion and to the best of our information and according to
the explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph 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:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
ii) in the case of Statement of Profit and Loss, of the loss for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date
Emphasis of Matter
8. We draw attention to note 44 to the financial statements which
describes that the Company has incurred a net loss of Rs.
1,949,631,502 for the year ended March 31, 2014 and is currently facing
liquidity problems. Management is evaluating various options and these
conditions as set forth in the aforesaid note coupled with situation
relating to Corporate Debt Restructuring Scheme, described in note 45
indicates the existence of a material uncertainty that may cast doubt
on Company continuing as a going concern. Our opinion is not qualified
in respect of this matter.
Report on Other Legal and Regulatory Requirements
9. 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.
10. 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 and proper returns adequate for the purposes of our audit have
been received from branches not visited by us;
c. we have received the reports on the accounts of the branch offices
audited under section 228 by other auditors and have appropriately
dealt with these while forming our audit opinion.
d. the financial statements dealt with by this report are in agreement
with the books of account and with the returns received from the
branches not visited by us;
e. Except for the effects of the matter described in the Basis of
Qualified Opinion paragraph, in our opinion, the financial statements
comply with the Accounting Standards notified under the Companies Act,
1956 read with the General Circular 15/2013 dated September 13, 2013 of
the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013 ; and
f. 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.
Other Matter
11. We did not audit the financial statements of certain branches,
included in these financial Statements, whose financial statements
reflect total assets (after eliminating intra-group transactions) of
Rs. 262,816,339 as at March 31, 2014; as well as the total revenue
(after eliminating intra-group transactions) of Rs. 385,077,833 for the
year ended March 31, 2014. These financial statements and other
financial information have been audited by other auditors whose audit
reports have been furnished to us, and our opinion in respect thereof
is based solely on the audit reports of such other auditors. Our
opinion is not qualified in respect of this matter.
Annexure to the Independent Auditors'' Report of even date to the
members of A2Z Maintenance & Engineering Services Limited, on the
financial statements for the year ended March 31, 2014
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 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.
(c) In our opinion, a substantial part of fixed assets has not been
disposed off during the year.
(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) (a) The Company has not granted any loan, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of clauses
4(iii)(b) to 4(iii) (d) of the Order are not applicable (e) The Company
has not taken any loans, secured or unsecured from companies, firms or
other parties covered in the register maintained under Section 301 of
the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g)
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 entered into any contracts or arrangements
referred to in Section 301 of the Act. Accordingly, the provisions of
clause 4(v) of the Order are not applicable.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the Companies
(Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
clause 4(vi) of the Order are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii)We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act in respect of Company''s products/services and
are of the opinion that, prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made a
detailed examination of the cost records with a view to determine
whether they are accurate or complete.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth tax, service tax, custom duty, excise duty, cess and
other material statutory dues, as applicable, have not been regularly
deposited with the appropriate authorities and there have been
significant delays in a large number of 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 become payable
(b) The dues outstanding in respect of income-tax, sales- tax, wealth
tax, service tax, custom duty, excise duty, cess on account of any
dispute, are as follows:
Name of the statute Nature of dues Amount Amount Paid
(Rs.) Under Protest
(Rs.)
West Bengal Value Works Contract tax 65,310,875 5,000,000
Added Tax Act, 2003
West Bengal Value West Bengal Value 101,939,698 17,500,000
Added Tax
West Bengal Central Central Sales Tax 5,412,848 -
Sales Tax Act, 2003
Bihar Value Added Bihar Value Added 8,354,879 -
Tax Act, 2005 Tax
Jharkhand Value Jharkhand Value 10,650,909 5,823,531
Added Tax Act, 2005 Added Tax
Andhra Pradesh Value Andhra Pradesh 6,294,726 3,125,000
Added Tax Act, 2005 Value Added Tax
Maharashtra Value Maharashtra Value 180,178,725 -
Added Tax Act, 2002 Added Tax
Maharashtra Value Maharashtra Value 1,552,490 -
Added Tax Act, 2002 Added Tax
Maharashtra Value Central Sales Tax 15,406,040 -
Added Tax Act, 2002
Name of the statute Period to Forum where dispute
which the is pending
amount
relates
West Bengal Value 2009-10 Joint Commissioner appeals,
Added Tax Act, 2003 Sales tax
West Bengal Value 2010-11 Joint Commissioner appeals,
Act, 2003 Added Tax Sales tax
West Bengal Central 2010-11 Honorable High Court,
Sales Tax Act, 2003 Kolkata
Bihar Value Added 2010-11 Remanded back to Assessing
Tax Act, 2005 Officer by the Joint
Commissioner Commercial tax
(Appeal), Bihar
Jharkhand Value 2008-09 to Joint Commissioner, commercial
Added Tax Act, 2005 2011-12 tax, Ranchi, Jharkhand
Andhra Pradesh Value 2010-11 Andhra Pradesh VAT Tribunal
Added Tax Act, 2005
Maharashtra Value 2008-09 Maharashtra Sales Tax Tribunal
Added Tax Act, 2002
Maharashtra Value 2009-10 Company is in the process of
Added Tax Act, 2002 filing appeal with Joint
Commissioner, Mumbai,
Maharashtra against the demand.
Time limit for filing such
appeal has not yet expired.
Maharashtra Value 2009-10 Company is in the process of
Added Tax Act, 2002 filing appeal with Joint
Commissioner, Mumbai,
Maharashtra against the demand.
Time limit for filing such
appeal has not yet expired.
(x) In our opinion, the Company has no accumulated losses at the end of
the financial year. The Company has incurred cash losses in the current
and the immediately preceding financial year.
(xi) There are no dues payable to or debenture-holders. The Company has
defaulted in repayment of dues to the following banks or financial
institutions:
a) Corporate Debt Restructuring Lenders with whom Master Restructuring
Agreement have been signed:
The Corporate debt restructuring (CDR) proposal to re-structure
existing debt obligations, including interest, additional funding and
other terms (hereafter referred to as "the CDR Scheme") of the Company,
having January 01, 2013 as the "cut- off date", was approved by the CDR
Cell vide its Letter of Approval (LOA) dated December 28, 2013 as
further modified dated February 03, 2014. Out of seventeen lenders,
twelve lenders (herein after termed as ''CDR lenders'') agreed to be part
of the CDR scheme.
Following is the summary of status of the loan, interest and
restructuring done under the CDR scheme:
Nature of Amount Outstanding Restructured
Amount (Rs. in Crore)
Term Loan 880,000,000 Since June First installment of the
2013 Principal repayment now
falls due on March 31,
2015
Working 414,400,000 From January Working capital term
Capital Limit 1, 2013 Loan (WCTL-1)-First to
September installment of the
30, 2013 Principal repayment now
falls due on March 31,
2015
Working 197,583,867 From June Working capital term
Capital Limit 1, 2013 to Loan (WCTL-2)First
November installment of the
30, 2013 Principal repayment of
Rs. 5,00,00,000 now falls
due on March 31, 2014 has
been repaid on June
7, 2014 of
Rs. 1,76,22,000 &
Rs. 3,23,78,000 on June
11, 2014
Interest on 117,926,028 From the First installment into
term Loan January 1, funded interest term loan
2013 to (FITL) of the FITL
March repayment now falls due
31, 2014 on March 31, 2015
Interest on 380,219,020 From the First installment into
Working January 1, funded interest term
Capital loan 2013 to loan(FITL) of the FITL
March repayment now falls due
31, 2014 on March 31, 2015
Nature of Date of restructuring
Amount by the bank
Term Loan March 29, 2014
Working Restructuring
Capital Limit date ranging from
December 30, 2013
to March 31, 2014
Working December 31, 2013
Capital Limit
Interest on March 29, 2014
term Loan
Interest on Restructuring date
Working ranging from
Capital loan November 22, 2013
to March 31, 2014
b) Other Lenders:
Due date Amount (Rs.) Delay in days*
November 30, 2012 8,150,709 486
December 31, 2012 67,015 455
January 31, 2013 19,307,893 424
February 28, 2013 16,646,994 396
March 31, 2013 11,384,700 365
April 30, 2013 36,025,569 335
May 31, 2013 21,592,373 304
June 30, 2013 20,578,607 274
July 15, 2013 6,674,922 259
July 31, 2013 17,206,770 243
August 31, 2013 23,457,816 212
September 30, 2013 22,737,868 182
October 15, 2013 6,874,963 167
October 31, 2013 22,017,610 151
November 30, 2013 21,526,899 121
December 31, 2013 22,820,761 90
January 31, 2014 35,947,523 59
February 28, 2014 29,979,360 31
* Delay in number of days as at year end-
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities. Accordingly, the provisions of clause 4(xii) of the Order
are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Accordingly, provisions of clause 4(xiii)
of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which these loans were obtained.
(xvii) In our opinion, no funds raised on short-term basis have been
used for long-term investment by the Company.
(xviii) During the year, the Company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under Section 301 of the Act. Accordingly, the provisions of
clause 4(xviii) of the Order are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions of clause 4 (xix) of the
Order are not applicable.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year, except for certain thefts of materials amounting to Rs.
63,042,251, identified by management during the year as explained in
Note No. 23.1 to the financial statements. The company has initiated a
legal action and has submitted claims for the aforesaid amount with the
insurance company.
For Walker Chandiok & Co., LLP
(formerly Walker, Chandiok & Co)
Chartered Accountants
Firm Registration No.: 001076N
Sd/-
per Neeraj Sharma
Place: Gurgaon Partner
Date : May 30, 2014 Membership No.: 502103
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying fnancial statements of A2Z
Maintenance & Engineering Services Limited, ("the Company"), which
comprise the Balance Sheet as at March 31, 2013, and the Statement of
Proft and Loss and Cash Flow Statement for the year then ended, and a
summary of signifcant accounting policies and other explanatory
information.
ManagementÂs Responsibility for the Financial Statements
2. Management is responsible for the preparation of these fnancial
statements, that give a true and fair view of the fnancial position,
fnancial performance and cash fows of the Company in accordance with
the accounting principles generally accepted in India, including 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 fnancial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors Responsibility
3. Our responsibility is to express an opinion on these fnancial
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 fnancial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the fnancial statements. The
procedures selected depend on the auditors judgment, including the
assessment of the risks of material misstatement of the fnancial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
CompanyÂs preparation and fair presentation of the fnancial 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 management, as well as evaluating the overall
presentation of the fnancial statements.
5. We believe that the audit evidence we have obtained is suffcient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the fnancial 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 the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
ii) in the case of Statement of Proft and Loss, of the loss for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash fows for the
year ended on that date. Emphasis of Matter
7. We draw attention to:
(a) Note 20.2 to the fnancial statement regarding outstanding
recoverable of Rs 64,381,729 and Rs 60,639,340, being deductions
proposed/ made by the respective customers on invoices raised by the
Company for services rendered, price escalations on certain supply
items and certain other items. There exists however material
uncertainty in respect of the collectability of the above receivables.
Pending the fnal outcome of the matter, no adjustments have been made
in these fnancial statements. Our audit report is not qualifed in
respect of this matter.
(b) Note 45 to the fnancial statement which describes that the Company
has incurred a net loss of Rs. 538,104,867 for the year ended March
31, 2013 and is currently facing acute liquidity problems. Management
is evaluating various options and has applied for restructuring of its
existing debt obligations, including interest and other related terms
and conditions under the corporate debt restructuring program. These
conditions as set forth in the aforesaid note indicates the existence
of a material uncertainty that may cast signifcant doubt on Company
continuing as a going concern. Our audit report is not qualifed in
respect of this matter.
Report on Other Legal and Regulatory Requirements
8. As required by the Companies (AuditorÂs 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 specifed in paragraphs 4 and 5 of the Order.
9. 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 and proper returns adequate for the purposes of our audit
have been received from branches not visited by us;
c. we have received the reports on the accounts of the branch offces
audited under section 228 by other auditors and have appropriately
dealt with these while forming our audit opinion.
d. the fnancial statements dealt with by this report are in agreement
with the books of account and with the returns received from the
branches not visited by us;
e. in our opinion, the fnancial statements comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the Act;
and
f. on the basis of written representations received from the
directors, as on March 31, 2013 and taken on record by the Board of
Directors, none of the directors is disqualifed as on March 31, 2013
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
Other Matter
(c) We did not audit the fnancial statements of two branches, included
in these fnancial statements, whose fnancial statements refect total
assets of Rs. 291,692,451 as at March 31, 2013, total revenues of Rs
432,982,332 and cash outfows of Rs 11,567,697 for the year ended March
31, 2013. These fnancial statements have been audited by the branch
auditor whose report has been furnished to us and our opinion in
respect thereof is based solely on his report. Our audit report is not
qualifed in respect of this matter.
Annexure to the Independent Auditors Report of even date to the
members of A2Z Maintenance & Engineering Services Limited, on the
fnancial statements for the year ended March 31, 2013
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the fnancial 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 fxed
assets.
(b) The Company has a regular program of physical verifcation of its
fxed assets under which fxed assets are verifed in a phased manner over
a period of three 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 verifcation.
(c) In our opinion, a substantial part of fxed assets has not been
disposed off during the year.
(ii) (a) The management has conducted physical verifcation of inventory
at reasonable intervals during the year.
(b) The procedures of physical verifcation 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 verifcation.
(iii) (a) The Company has granted unsecured loans to two parties
covered in the register maintained under Section 301 of the Act. The
maximum amount outstanding during the year is Rs. 170,976,132 and the
year-end balance is Rs. 170,976,132.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not, prima facie, prejudicial to the interest of the
Company.
(c) In respect of loans given, the principal and interest amounts are
repayable on demand and since the repayment of such loans and interest
thereon has been made whenever demanded, in our opinion, repayment of
the principal and interest amounts is regular.
(d) There is no overdue amount in respect of loans granted to such
companies.
(e) The Company has not taken any loans, secured or unsecured from
companies, frms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of clauses
4(iii)(f) and 4(iii)(g) 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 fxed 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 entered into any contracts or arrangements
referred to in Section 301 of the Act. Accordingly, the provisions of
clause 4(v) of the Order are not applicable.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the Companies
(Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
clause 4(vi) of the Order are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act in respect of CompanyÂs products/services and
are of the opinion that, prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made a
detailed examination of the cost records with a view to determine
whether they are accurate or complete.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, income-tax,
sales- tax, wealth tax, service tax, custom duty, excise duty, cess and
other material statutory dues, as applicable, have not been regularly
deposited with the appropriate authorities and there have been
signifcant delays in a large number of cases. Undisputed amounts
payable in respect thereof, which were outstanding at the year-end for
a period of more than six months from the date they became payable are
as follows:
Name of the stat- Nature of Amount Period to which
ute the dues (Rs) the amount relates
Finance Act, 1994 Service Tax 8,602,339 2012-13
Finance Act, 1994 Service Tax 9,730,720 2012-13
Finance Act, 1994 Service Tax 7,044,748 2012-13
Finance Act, 1994 Service Tax 5,163,623 2012-13
Finance Act, 1994 Service Tax 3,448,106 2012-13
Name Due Date Date of Payment
Finance Act, 1994 May 5, 2012 Not yet paid
Finance Act, 1994 June 5, 2012, Not yet paid
Finance Act, 1994 July 5, 2012 Not yet paid
Finance Act, 1994 August 5, 2012 Not yet paid
Finance Act, 1994 September 5,
2012 Not yet paid
(x) In our opinion, the Company has no accumulated losses at the end of
the fnancial year and it has not incurred cash losses in the
immediately preceding fnancial year; however, in the current fnancial
year, the Company has incurred cash losses.
(xi) There are no dues payable to fnancial institutions or
debenture-holders. The Company has defaulted in repayment of dues to
banks as follows:
*Delay in number of days as at year end (xii) The Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities. Accordingly, the
provisions of clause 4(xii) of the Order are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual beneft fund/ society. Accordingly, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or fnancial
institutions are not, prima facie prejudicial to the interest of the
Company.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which these loans were obtained.
(xvii) In our opinion, no funds raised on short-term basis have been
used for long-term investment.
(xviii) During the year, the Company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under Section 301 of the Act. Accordingly, the provisions of
clause 4(xviii) of the Order are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions of clause 4(xix) of the
Order are not applicable.
(xx) The Company has not raised any money by public issues during the
year. The management of the Company has disclosed the end use of monies
raised by public issue in the previous year / earlier years in the
current year fnancial statements and the same has been verifed by us.
(xxi) According to the information and explanations furnished by the
management, which have been relied upon by us, there were no frauds on
or by the Company noticed or reported during the course of our audit
except for theft by unidentifed individuals of materials amounting to
Rs. 29,171,477 and of cash amounting to Rs. 3,820,131 reported during
the year as referred to in Note No. 23.1 of the fnancial statements.
The impact whereof is also explained in the said Note.
For Walker, Chandiok & Co
Chartered Accountants
Firm Registration No.: 001076N
Sd/-
per Neeraj Sharma
Place: Gurgaon Partner
Date: May 29, 2013 Membership No.: 502103
Mar 31, 2012
1. We have audited the attached Balance Sheet of A2Z Maintenance &
Engineering Services Limited ('the Company'), as at March 31, 2012, and
also the Statement of Profit and Loss and the Cash Flow Statement for
the year ended on that date annexed thereto (collectively referred as
the 'financial statements'). These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the 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.
3. As required by the Companies (Auditor's Report) Order, 2003 ('the
Order') (as amended) issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Companies Act, 1956 ('the
Act'), we enclose in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
4. We did not audit the financial statements of a branch, included in
these financial statements, whose financial statements refect total
assets of Rs. 192,074,450 as at March 31, 2012, total revenues of Rs
496,020,017 and cash outflows of Rs 9,227,717 for the year ended March
31, 2012. These financial statements have been audited by the branch
auditor whose report has been furnished to us and our opinion in
respect thereof is based solely on his report.
5. Without qualifying our opinion, we draw attention to Note 20.2 to
the financial statements regarding outstanding recoverable of Rs
64,381,729 and Rs 60,639,340, being deductions proposed/ made by the
respective customers on invoices raised by the Company for services
rendered, price escalations on certain supply items and certain other
items. There exists however material uncertainty in respect of the
collectability of the above receivables. Pending the final outcome of
the matter, no adjustments have been made in these financial statements.
6. Further to our comments in the Annexure referred to 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 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 appears from our examination of
those books and proper returns adequate for the purposes of our audit
have been received from the branch not visited by us. The branch
auditors' report has been forwarded to us and has been appropriately
dealt with;
(c) The financial statements dealt with by this report are in agreement
with the books of account and with the returns received from the branch
not visited by us;
(d) On the basis of written representations received from the
directors, as on March 31, 2012 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(e) In our opinion and on consideration of report of the other auditor
on the branch's separate financial statements and on the other financial
information and to the best of our information and according to the
explanations given to us, the financial statements dealt with by this
report comply with the accounting standards referred to in sub-section
(3C) of Section 211 of the Act and 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,
in the case of:
(i) the Balance Sheet, of the state of affairs of the Company as at
March 31, 2012;
(ii) the Statement of Profit and Loss, of the Profit for the year ended
on that date; and
(iii) the Cash Flow Statement, of the cash flows for the year ended on
that date.
Annexure to the Auditors' Report of even date to the members of A2Z
Maintenance & Engineering Services Limited, on the financial statements
for the year ended March 31, 2012 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 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.
(c) In our opinion, a substantial part of fixed assets has not been
disposed off during the year.
(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 were noticed on physical verification.
(iii) (a) The Company has granted unsecured loans to three parties
covered in the register maintained under Section 301 of the Act. The
maximum amount outstanding during the year is Rs. 632,500,000 and the
year-end balance is Rs. Nil.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not, prima facie, prejudicial to the interest of the
Company.
(c) In respect of loans given, the principal and interest amounts are
repayable on demand and since the repayment of such loans and interest
thereon has been made whenever demanded, in our opinion, repayment of
the principal and interest amounts is regular.
(d) There is no overdue amount in respect of loans granted to such
companies.
(e) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of clauses
4(iii)(f) and 4(iii)(g) 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 entered into any contracts or arrangements
referred to in Section 301 of the Act. Accordingly, the provisions of
clause 4(v) of the Order are not applicable.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the Companies
(Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
clause 4(vi) of the Order are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) According to the information and explanations provided to us,
the Companies (Cost Accounting Records) Rules 2011 have become
applicable to the Company during the current year; however, no specific
formats for the maintenance of the cost records have been prescribed
under the said rules. The management believes that the cost records
currently maintained by the Company provide the information required
under the said rules. We have broadly reviewed the books of account
maintained by the Company pursuant to the Rules made by the Central
Government for maintenance of cost records under clause (d) of
sub-section (1) of Section 209 of the Act and are of the opinion that,
prima facie, the prescribed accounts and records have been made and
maintained. However, we have not made a detailed examination of the
cost records with a view to determine whether they are accurate or
complete.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service-tax, custom duty, excise duty, 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. 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 sales-tax, income-tax, custom
duty, wealth-tax, excise duty, cess on account of any dispute, are as
follows:
Name of the statute Nature of dues Gross Amount
amount of deposited
dispute (Rs) (Rs)
West Bengal Value Works Con- 5,874,275 5,000,000
Added Tax Act, 2003 tract tax
West Bengal Value Works Con- 40,718,046 17,500,000
Added Tax Act, 2003 tract tax
Bihar Value Added Bihar Value 8,354,879 2,160,881
Tax Act, 2005 Added Tax
Jharkhand Value Jharkhand 10,650,909 -
Added Tax Act, 2005 Value Added
Tax
Andhra Pradesh Andhra 6,294,816 1,335,764
Value Added Tax Pradesh Value
Act, 2005 Added Tax
Name of the Statue Period to Forum where dispute
which the is pending
amount relates
West Bengal Value
Added Tax Act, 2003 2009-10 Joint Commissioner,
Sales Tax
West Bengal Value
Added Tax Act, 2003 2010-11 Joint Commissioner,
Sales Tax
Bihar Value Added
Tax Act, 2005 2010-11 Joint commissioner,
commercial tax
(Appeal), Bihar
Jharkhand Value
Added Tax Act, 2005 2008-09 to Commissioner.
2011-12 Commercial tax,
Ranchi, Jharkhand
Andhra Pradesh
Value Added Tax
Act, 2005 2010-11 Appellate Deputy
commissioner (CT),
Vishakhapatnam
(x) In our opinion, the Company has no accumulated losses at the end of
the financial year and it has not incurred cash losses in the current
and the immediately preceding financial year.
(xi) In our opinion, the Company has not defaulted in repayment of dues
to a financial institution or a bank or debenture-holders during the
year.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities. Accordingly, the provisions of clause 4(xii) of the Order
are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Accordingly, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which these loans were obtained.
(xvii) In our opinion, no funds raised on short-term basis have been
used for long-term investment.
(xviii) During the year, the Company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under Section 301 of the Act. Accordingly, the provisions of
clause 4(xviii) of the Order are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions of clause 4(xix) of the
Order are not applicable.
(xx) The Company has not raised any money by public issues during the
year. The management of the Company has disclosed the end use of monies
raised by public issue in the previous year / earlier years in the
current year financial statements and the same has been verifed by us.
(xxi) We have been informed that theft by unidentified individuals of
materials amounting to Rs. 38,560,431 and of cash amounting to Rs.
21,500 has been reported during the year as referred to in Note No.
23.1 of the financial statements. Other than this, based upon the audit
procedures performed for the purpose of reporting the true and fair
view of the financial statements and as per the information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For Walker, Chandiok & Co
Chartered Accountants
Firm Registration No.: 001076N
Sd/-
per Rajesh Jain
Place : Gurgaon Partner
Date : August 23, 2012 Membership No.: 81203
Mar 31, 2011
(Formerly known as A2Z Maintenance & Engineering Services Private
Limited)
1. We have audited the attached Balance Sheet of A2Z Maintenance &
Engineering Services Limited ('the Company') as at March 31, 2011 and
also the Profit and Loss Account and the Cash Flow Statement for the
year ended on that date annexed thereto. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
2. 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.
3. We did not audit the financial statements of a branch of the Company
registered in Uganda, whose financial statements refect total assets of
Rs. 147,825,813 as at March 31, 2011, the total revenue of Rs.
85,719,134 and cash infows amounting to Rs. 22,426,310 for the year
then ended. The financial statements and other financial information of
branch not audited by us have been audited by other auditors whose
report has been furnished to us, and our opinion in so far as it
relates to the amounts included for such branch is based solely on the
report of the other auditor.
4. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specifed in paragraphs 4 and
5 of the said Order.
5. Further to our comments in the Annexure referred to above, we
report that:
i. 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;
ii. 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 and proper returns adequate for the purposes of our audit
have been received from branches not visited by us. The Branch
Auditor's Report have been forwarded to us and have been appropriately
dealt with;
iii. The balance sheet, profit and loss account and cash fow statement
dealt with by this report are in agreement with the books of account
and with the audited returns from the branches;
iv. In our opinion, the balance sheet, profit and loss account and cash
fow statement dealt with by this report, comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualifed as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. In our opinion and on consideration of reports of the other auditor
on the branch's separate financial statements and on the other financial
information and to the best of our information and according to the
explanations given to us, the said 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.
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2011;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of cash fow statement, of the cash fows for the year
ended on that date.
Annexure referred to in paragraph 4 of our report of even date
Re: A2Z Maintenance & Engineering Services Limited ('the Company')
(Formerly known as A2Z Maintenance & Engineering Services Private
Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verifed by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. As informed, no material discrepancies
were noticed on such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The management has conducted physical verification of inventory
at reasonable intervals during the year. Inventories lying with outside
parties have been confrmed by them as at the year end.
(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 were noticed on physical verification.
(iii) (a) According to the information and explanation given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956 and accordingly, paragraphs 4(iii) (a),
(b), (c) and (d) of the Companies (Auditor's Report) Order, 2003 (as
amended) are not applicable to the Company and hence not commented
upon.
(b) The Company had taken loan from a partnership firm covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 366,471,232 and the
year-end balance of loan taken from such party was Rs. Nil.
(c) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loan is not prima facie prejudicial to the interest of the
Company.
(d) The loan taken was re-payable on demand. As informed to us, the
lenders have demanded repayment of such loan during the year which has
been repaid and thus, there has been no default on the part of the
Company. The payment of interest was regular.
(iv) As per the information and explanations given to us, certain
project materials and fixed assets purchased are of specialized nature
for which comparable prices are not available. Read with the above, 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, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
Therefore, the provisions of clause 4(vi) of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable to the Company.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed the maintenance of cost records under
clause (d) of sub-section (1) of section 209 of the Companies Act, 1956
for the products of the Company.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues have generally been regularly deposited
with the appropriate authorities though there has been a slight delay
in a few cases.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the Nature of dues Amount Period to
which the Forum where dispute
is pending
statute (Rs.) amount
relates
Bihar Value
Added Sales tax dues 9,700,638 2009-10 Joint Commissioner of
Tax Act,
2005 Commercial Taxes
(Appeals)
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or banks. The Company has no outstanding dues in respect of
debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced 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, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended)
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 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans and facilities taken by
subsidiaries from banks, the terms and conditions whereof in our
opinion are not prima-facie prejudicial to the interest of the Company.
According to the information & explanation given to us, there are no
other guarantees given by the Company for loans taken by others from
bank or financial institutions.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the 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 have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) Based on information and explanations given to us by the
management, we have verifed that the end use of money raised by public
issues is as disclosed in the notes to the financial statements.
(xxi) We have been informed that theft by unidentifed individuals of
materials amounting to Rs. 19,292,915 has been reported during the year
as referred to in Note No. 8 of Schedule 22 of the financial statements
the impact whereof is explained in the said Note. Other than this,
based upon the audit procedures performed for the purpose of reporting
the true and fair view of the financial statements and as per the
information and explanations given by the management, we report that no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration No. 101049W
Chartered Accountants
Sd/-
per SANJAY VIJ
Place : Gurgaon Partner
Date : May 30, 2011 Membership No.: 95169
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