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Auditor Report of National Buildings Construction Corporation Ltd. Company
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Union Budget 2017-18
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Auditor Report of National Buildings Construction Corporation Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of National Buildings Construction Corporation Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 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.

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 to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the 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 and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

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 control relevant to the Company''s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal 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 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

9. We draw attention to

a) There are outstanding dues on account of Trade Receivables amounting to Rs. 6025.07 Lakhs (previous year Rs. 4791.25 Lakhs) in respect of closed inland projects, which are more than three years old including an amount of Rs. 3399.00 Lakhs (previous year Rs. 3598.52 Lakhs) under litigation/arbitration. The same have been shown as good for recovery (Refer Note No 14 )

b) No provision has been made for penal levy amounting to Rs. 1654.93 Lakhs (previous year Rs. 1654.93 Lakhs) for guarantees given by the government for loans taken in earlier years by the Company in view of issue being under dispute though the same has been shown as contingent liability (Refer Note No. 29)

Our opinion is not qualified in respect of these matters.

Other Matter

10. The standalone financial statements of the Company as at 31st March, 2014 and for the year then ended were audited by another firm of chartered accountants under the Companies Act, 1956 who, vide their report dated 26th May, 2014, expressed an unmodified opinion on those financial statements.

Report on Other Legal and Regulatory Requirements

11. As required by ''the Companies (Auditor''s Report) Order, 2015'', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. We enclose our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure II on the directions and sub directions issued by the Comptroller and Auditor General of India.

13. 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 purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the 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.

(e) On the basis of written representation received from the directors as on 31st March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i The Company has disclosed the impact of pending litigations as at 31st March, 2015 on its financial position in its standalone financial statements - Refer Note No. 29;

ii. The Company did not have any long-term contracts including derivative contracts as at 31st March, 2015

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2015

Annexure I to Independent Auditors'' Report

Referred to in paragraph 11 of the Independent Auditors'' Report of even date to the members of National Buildings Construction Corporation Limited on the standalone financial statements as of and for the year ended 31st March, 2015

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account. In our opinion, the frequency of verification is reasonable.

ii. (a) The inventory has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, 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. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. We have broadly reviewed the books of account maintained by the Company in respect of Engineering, Procurement and Construction (EPC) division where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. For Project Management and Consultancy (PMC) and Real Estate division we have been informed that these activities are carried on back to back basis by sub contractors appointed by the Company, hence, Company is not required to maintain cost records for these divisions.

vii. (a) According to the information and explanation given to us and the records of the company examined by

us, in our opinion, the company is generally regular in depositing undisputed statutory dues, including Provident Fund, Value Added Tax/Sales Tax, Service Tax, Cess, Income Tax, Wealth Tax and other material statutory dues, as applicable, with the appropriate authorities. We have been informed that the provisions of the Employees state Insurance Act are not applicable to the Company.

(b)According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, Service Tax, Value Added Tax /Sales Tax as at 31st March, 2015 which have not been deposited on account of a dispute are as follows:

Name of Nature of dues Rs.(in lakhs) Period to which the statute the amount relates

Sales Tax Act Sales Tax 619.62 2008-09 to 2013-14



Income Tax Income Tax 157.64 2011-12

Act, 1961 86.73 2010-11

66.57 2008-09

5.67 2007-08

226.93 2007-08 (Re-Assessment)

1582.18 2006-07 (Re-Assessment)

Finance Service Tax 1076.66 2007-08 to 2013-14

Act, 1994 84.44 2010-11

871.02 2009-10 to 2014-15

Name of Forum where the the statute dispute is pending

Sales Tax Act Joint Commissioner,

Commercial Taxes

Income Tax Commissioner (Appeals)

Act, 1961 Appellate Tribunal

Appellate Tribunal

Appellate Tribunal

Commissioner (Appeals)

Appellate Tribunal

Finance CESTAT

Act, 1994 CESTAT

Appeal not filed yet

(c) There are no amounts required to be transferred by the Company to the Investor Education and Protection Fund in accordance with the provisions of the Act, and the rules made there under.

viii. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

Ix. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(Ix) of the Order are not applicable to the Company.

x. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the Company

xI. The Company has not raised any term loans. Accordingly, the provisions of Clause 3(xI) of the Order are not applicable to the Company.

xII. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

Annexure II to Independent Auditors’ Report

Directions and sub directions indicating the areas to be examined by the Statutory Auditors during the course of audit of Annual Accounts of the National Buildings Construction Corporation Limited for the year 2014-15 issued by the Comptroller & Auditor General of India under section 143 (5) of the Companies Act, 2013.

Referred to in paragraph 12 of the Independent Auditors'' Report of even date to the members of National Buildings Construction Corporation Limited on the standalone financial statements as of and for the year ended 31st March, 2015

Sl. Directions/Sub Directions Action Taken No.

A. Directions

1 If the company has As per information & explanation been selected for given to us the Department of disinvestment, a Disinvestment through complete status Ministry of Urban Development report in terms of decided 10% disinvestment valuation of Assets of government equity in the (including intangible company through public issue assets and land) which closed on 27.03.2012. and liabilities (including There is no further Committed & disinvestment by Govt. General Reserves) may be of India during the examined including the mode year 2014-15 and present stage of disinvestment process?

2 Please report whether there There is a write off of the are any cases of waiver/write Trade Receivable amounting off debits/loans/interest etc., Rs. 396.07 lacs and Loans and if yes, the reasons there for Advances amounting to Rs. 35.66 and the amount involved? lacs during the financial year 2014-15. These debts are under constant pursuation for realization till final settlement made with client or in case of dispute, verdict is passed by the arbitrator/court. Necessary provision against doubtful debts/loans and advances is made based on the previous experience of management. Receivable/ Advances are written off as and when considere unrealizable. It is pertinent to mention that all these dues which have been written off during the year pertain to the Govt. Departments.

3 Whether proper records As per information & are maintained for inventories explanation given to us NIL lying with third parties & there is no inventory lying assets received as gift with third parties from Government or other and no assets received as authorities? gift from Government or other authorities.

4 A report on age-wise There are 235 pending analysis of pending legal/arbitration cases NIL legal/arbitration cases against/by the company. including the reasons of The age-wise pendency and existence/ classification obtained effectiveness of a monitoring from the management mechanism for expenditure on is as under- all legal cases (foreign and local) may More : 2 be given? than 25 years

A. Directions

Fifteen to Twenty Five years : 20

Five to Fifteen years : 91

Less than Five years : 122

The cases are under sub judiciary & the company does not have any control on the procedures/ methods adopted by Arbitrators/courts for the settlement. The company has a separate legal cell which maintains a penal of lawyers who are prosecuting / defending the cases on behalf of the company. The legal cell maintain status of pending cases & coordinate with the advocates by providing necessary documents/information in order to safeguard the interest of the company. The company is maintaining a penal of advocates & schedule of pre approved fee. Hence the expenditure on legal fee is being monitored/ controlled by law division of the company.

B Sub Directions : NIL

Sl. Directions/Sub Directions Impact on No. financial statement A. Directions

1 If the company has Not been selected for Applicable disinvestment, a complete status report in terms of valuation of Assets (including intangible assets and land) and liabilities (including Committed & General Reserves) may be examined including the mode and present stage of disinvestment process?

2 Please report whether there are any cases of waiver/write Already off debits/loans/interest etc., accounted if yes, the reasons there for and the amount involved?

3 Whether proper records are maintained for inventories Nill lying with third parties & assets received as gift from Government or other authorities?

4 A report on age-wise analysis of pending legal/arbitration cases Nill including the reasons of pendency and existence/ effectiveness of a monitoring mechanism for expenditure on all legal cases (foreign and local) may be given?

A. Directions



For JAGDISH CHAND & CO. Firm Registration Number: 000129N Chartered Accountants

Sd/- (J.C. Gupta) Place of signature: New Delhi Partner Date: 22nd May, 2015 Membership Number :006107


Mar 31, 2014

We have audited the accompanying financial statements of National Buildings Construction Corporation Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and Cash Flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our 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, we consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

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

Emphasis of Matter

We draw attention to the following:-

a) Offices/projects outside India have not been visited by us. Investment, turnover and profit in respect of such foreign projects has been incorporated based on the records available at Head Office and as certified by the Management.

b) Adjustments that may arise on account of final settlement of accounts with various Clients, PRWs, Suppliers & others and their balances are subject to reconciliation and confirmation (Refer Note 3 and Note 33 of Notes of Financial Statements).

Report on Other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) in our opinion, the Balance Sheet, statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of 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.

e) As per Notification No. GSR 829(E) dated 21.10.2003 issued by the Department of Companies Affairs, the provisions of Section 274(1)(g) of the Companies Act, 1956 are not applicable to the Company.

f) Further to our comments above, we are unable to ascertain and report the impact on the state of affairs / profitability on account of the following:-

i) There are outstanding dues on account of book debts amounting to Rs.4791.25Lakhs (previous year Rs.5534.81 Lakhs) in respect of closed inland projects, which are more than three years old including an amount of Rs.3598.52 Lakhs (previous year Rs. 1360.88 Lakhs) under litigation/arbitration. The same have been shown as good for recovery (Refer Note 12 of Financial Statements).

ii) No provision has been made for penal levy amounting to Rs.1654.93 Lakhs (previous years Rs. 1654.93 Lakhs) for guarantees given by the government for loans taken by the Company in view of issue being under dispute though the same has been shown as contingent liability (Refer Note 30 of Financial Statements).

Annexure to Auditor''s Report

With reference to the Annexure referred to in the Auditor''s report, to the members of the company on the financial statements for the period ended 31st March 2014, we report that:

1. In respect of its fixed assets:

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

b) All the assets have been physically verified by the Management during the year according to a regular program of verification, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any substantial part of its fixed assets during the year, which may have any impact on the going concern nature of the company.

2. In respect of its inventories:

a) According to the information and explanations given to us, inventories have been physically verified during the year by the management, except those lying with outside parties or under custody of clients.

b) In our opinion, 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) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on verification between the physical stocks and the book records.

3. a) The Company has not granted any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub- clauses (a), (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company.

b) 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. Therefore, the provisions of sub-clauses (a), (b), (c) and (d) of clause of 4(iii) of the order are not applicable to the company.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any instance of major weaknesses in such internal controls.

5. Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Act. Accordingly, clause 4(v)(b) of the Order is not applicable to the company.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

7. On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of Internal audit system carried out by the firms of Chartered Accountants appointed by the management and by the Internal Audit department of the company, has further scope for improvement to be commensurate with the size of the company and nature of the its business.

8. We are of the opinion that prima facie, the Cost records have been prescribed by the Central Government under clause (d) of sub section (I) of Section 209 of the Act. For the Financial year 2013-14, cost records are under preparation.

9. a) According to the information and explanations given to us and the records of the Company examined by us, we are of the opinion that, statutory dues like Sales Tax/ Value Added Tax, Income Tax, Provident Fund, Investor Education and Protection Fund, Wealth Tax, Service Tax, Custom Duty, Labour Welfare Cess, and other material statutory dues applicable to the company, have been generally regularly deposited during the year with the appropriate authorities. There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the aforesaid section has not yet been made effective by Central Government. According to the informations and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at 31st March , 2014 for the period of more than six months from the date on which they became payable. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the company.

b) According to information and explanations given to us and the records of the company examined by us, the particulars of dues of sales tax, income tax, and service tax, as at 31st March 2014 which have not been deposited on account of a dispute, are as follows:-

Name of the Statute Nature of dues Amount (Rs) Period Forum where dispute is pending

Sales Tax Act Sales Tax 16.26 2012-13 HIGH COURT, JAIPUR

Central Board of Excise Service Tax 128.03 2011-12 CIT (A) and Customs

Service Tax 1119.73 2010-11 CESTAT

Service Tax 66.57 2009-10 ITAT

Service Tax 11.49 2008-09 ITAT

Service Tax 226.93 2008-09 (Re-open) CIT (A)

Service Tax 2534.5 2007-08 (Re-open) CIT (A)

Income Tax Act, 1961 Income Tax 152 2007-08 CIT (A)

Income Tax 14.47 2006-07 ITAT

Income Tax 348.58 2004-05 ITAT

Income Tax 2003-04 ITAT

Income Tax 2000-01 ITAT

Income Tax 58.47 2003-04 (Re-open) ITAT

Income Tax 120.00 2002-03 ITAT

10. The company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to bank and financial institution. Asthe company has not borrowed any sums by way of debentures or otherwise.

12. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a Nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para-4 of the order are not applicable to the company.

14. According to the information and explanations given to us, the Company has not dealt/traded in shares, securities, debentures and other investments except investments in UTI Liquid fund cash plan, IDBI Liquid fund plan, SBI Premier Liquid fund plan and Canara Robeco Liquid fund plan. In our opinion and according to the information and explanations given to us, proper records have been maintained for the said investments and the same has been held by the company, in its own name.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. According to the information and explanations given to us there is no loan outstanding as at the end of the year. The company has not obtained any terms loan during the year.

17. According to the information and explanations given to us, and on an overall examination of the balance sheet of the company, we are of opinion that there are no funds raised on short-term basis that have been used for long-term investment.

18. According to information and explanation given to us, the Company has not made any preferential allotment of shares during the year to parties and companies to parties covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year. Accordingly, paragraph 4(xix) of the Order is not applicable.

20. The Company has not raised money by way of Public Issue during the year. Accordingly, paragraph 4(xx) of the order is not applicable.

21. During the course of our examination of the books and records of the Company, and according to the information and explanations given to us by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit, nor we have been informed of such case by the management.

For Sharma Goel & Co.LLP

Chartered Accountants FRN:000643N

Sd./-

Place : New Delhi Amar Mittal

Date : 26.05.2014 (Partner)

M.No.017755


Mar 31, 2012

1. We have audited the attached Balance Sheet of National Buildings Construction Corporation Limited as at 31st March, 2012 and also the Profit & 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 misstatements. 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 the Management, as well as evaluating the over- all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 as amended by Companies( Auditors' Report) (Amendment) order, 2004( hereinafter referred to as the order) , issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of books and records of the Company as we considered appropriate and according to the explanations given to us, we annex hereto a statement on matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph-3 above and subject to what is stated here in below vide paragraph- (vi), we report that:-

i) We have obtained all information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) In our opinion, proper books of accounts as required by law have been kept by the Company in so far as appears from our examination of the books;

iii) The Balance Sheet, Profit and Loss Account & Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

iv) In our opinion, Balance Sheet, Profit & Loss Account and Cash Flow Statement have been drawn in accordance with the Accounting Standards referred to clause 3(c) of Section 211 of the Companies Act, 1956;

v) Since Section 274(1)(g) of the Companies Act, 1956 is not applicable to the Government Companies, as per Notification No. GSR 829(E) dated 21/10/2003 issued by Department of Companies Affairs; we have no comments regarding disqualification for appointment of directors;

vi) Further to our comments above, we are unable to ascertain and report the impact on the state of affairs/profitability on account of the following:-

a) Offices/projects outside India have not been visited by us. As per the information given to us, some works have been performed under overseas projects during the year. Exchange fluctuation and other income/ expenditure transactions have taken place in respect of such Overseas Projects and the same has been accounted for. Investment in respect of such foreign project has been incorporated based on the records available at Head Office and as certified by the Management.

b) Adjustments that may arise on account of reconciliation and final settlement of accounts with various Clients, PRWs, Suppliers and others (Refer Note No. 4 of Notes on Financial Statements).

c) There are outstanding dues on account of book debts amounting to Rs. 5858.36 lakhs (previous year Rs. 4045.37 lakhs) in respect of closed inland projects, which are more than three years old including an amount of Rs. 1742.30 lakhs (previous year Rs. 1756.18 lakhs) under litigation/arbitration. The same have been shown as good for recovery (Refer Note No. 12 of Notes on Financial Statements).

d) Balances of trade receivables, trade payables and loans and advances are subject to reconciliation and confirmation (Refer Note No. 35 of Notes on Financial Statements).

e) Investment towards equity participation of NBCC in Joint Venture has been accounted for on payment /adjustment basis. The aggregate amount of each of the Assets, Liabilities, Income and expenses related to interest in Joint Venture has not been incorporated (Refer Note No. 9A of Notes on Financial Statements).

f) The Company has written-back certain old unclaimed credit balances of Rs. 1308.71 lakhs (previous year Rs. 404.03 lakhs) based on review/ assessment done by the management (Refer Note No. 21 of Notes on Financial Statements).

g) No provision has been made for penal levy amounting to Rs. 1654.93 lakhs (previous years Rs. 1654.93 lakhs) for guarantee given by the government for loans taken by the Corporation in view of issue being under dispute though the same has been shown as contingent liability (Refer Note No. 31 of Notes on Financial Statements ).

Subject to what is stated in paragraph 4 (vi) (a) to (g), in our opinion and to the best of our information and according to the information and explanations given to us, the said accounts, read with notes to financial statements, give a true and fair view in conformity with the Accounting Principles generally accepted in India:-

a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2012.

b) In the case of Profit & Loss Account, of the profit of the company for the year ended on that date; and

c) In the case of the Cash-Flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in Paragraph '3' of the Auditors' Report of even date)

i) (a) In terms of information and explanations given to us and the books and records examined by us in the normal course of audit, we report that, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, there is a regular programme of verification of fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any substantial part of its fixed assets during the year, which may have any impact on the going concern nature of the company.

ii) a) According to information and explanations given to us, inventories have been physically verified during the year by management, except those lying with outside parties or under custody of clients.

b) In our opinion and according to the explanations provided to us, the procedures adopted for physical verification of inventory are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company has generally maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and these have been properly dealt with in the books of accounts.

iii) a) The Company has not granted any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub-clauses (a), (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company.

b) The Company has not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub-clauses (a), (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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. During the course of our audit, we have not observed any continuing major weakness in such internal controls.

v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Act. Accordingly, clause 4(v) (b) of the Order is not applicable to the Company.

vi) The Company has not accepted any deposits from the public under the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

vii) On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of internal audit system carried out by the firms of Chartered Accountants appointed by the management and by the Internal Audit department of the company, has further scope for improvement to commensurate with the size of the company and the nature of its business.

viii) Cost records have been prescribed by the Central Government under clause(d) of Sub Section (I) of Section 209 of Act. However as NBCC is engaged in contracting or sub-contracting activities and is paid only the job work or conversion charges the company is not covered under Companies(Cost Accounting Records) Rules 2011.

ix) a) According to the information and explanations given to us and the records of the Company examined by us, we are of the opinion that, statutory dues like Sales Tax/Value Added Tax, Income Tax, Provident fund, Wealth Tax, Service Tax, Custom Duty, Labour Welfare Cess and other material statutory dues applicable to the company, have been generally regularly deposited during the year with the appropriate authorities subject to an exception of undeposited amount of Labour Welfare Cess to the tune of Rs. 1996.27 lakhs disclosed in Note 6 of the Notes to financial statements under the head other Current Liabilities. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2012 for the period of more than six months from the date on which they became payable except in the case of undeposited amount of Rs. 1996.27 lakhs pertaining to Labour Welfare Cess as mentioned above. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales-tax, income-tax & service tax, as at 31st March, 2012 which have not been deposited on account of a dispute, are as follows:-

Nature of dues Amount Due (Rs. Lakhs) (Forum where Lakhs) disputes are pending

Sales Tax 16.26 Sales Tax Board, Jaipur

Income Tax 514.93 ITAT

Service Tax 1119.73 CESTAT

Total 1650.92

x) The company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi) According to the information and explanation given to us and the records examined by us, the company has not defaulted in repayment of dues to Govt. of India, financial institutions, banks or debenture holders.

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

xiii) The Company is not a chit fund or a nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para-4 of the order are not applicable to the company.

xiv) According to the information and explanations given to us, the Company has not dealt/traded in shares, securities, debentures and other investments except investments in UTI Liquid Fund Cash Plan and lDBI Liquid Fund Cash Plan. In our opinion and according to the information and explanations given to us proper records have been maintained for the said investments and the same has been held by the company, in its own name.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi) According to the information and explanations given to us there is no loan outstanding as at the end of the year. The Company has not obtained any term loan during the year.

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 the company has not used funds raised on short term basis for long term investments.

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies' Act, 1956.

xix) According to the information and explanations given to us, the Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

xx) According to the information and explanations given to us, the Company during the year has not raised any fund by way of public issue.

xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, has been noticed or reported during the year, nor we have been informed of such case by the Management.

For Amit Ray & Co.,

Chartered Accountants

(ICAI Firm No. 000483C)

Amitava Ray

Place : New Delhi Partner

Dated : 29.05.2012 Membership No. 6947


Mar 31, 2008

Not Available


Mar 31, 2006

1. We have audited the attached Balance Sheet of National Buildings Construction Corporation Limited as at 31st March 2006 and also the Profit & 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 misstatements. 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 the Management, as well as evaluating the over-all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 here in above and subject to what is stated here-in below vide paragraph (vi), we report that :-

(i) We have obtained all information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

(ii) In our opinion, proper books of accounts as required by law have been kept by the Company in so far as appears from our examination of the books.

(iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

(iv) In our opinion, Balance Sheet and Profit & Loss Account have been drawn in accordance with the Accounting Standards referred to clause 3(c) of Section 211 of the Companies Act, 1956 except for Accounting Standards in respect of the following matters :

(A) Accounting policy No. 6(a)(iii) has been followed in preference to Accounting Standard

11 (AS 11) Accounting for the Effects of changes in Foreign Exchange Rates issued by the Institute of Chartered Accountants of India regarding conversion of accounts of Libyan and Iraqi projects into Indian Currency. (Refer Para (vi)(d) below)

(v) Since Section 274(1)(g) of the Companies Act, 1956 is not applicable to the Government Companies, as per Notification No. GSR 829 (E) Dated 21/10/2003 issued by Department of Companies Affairs, we have no comments regarding disqualification for appointment of directors.

(vi) Further to our comments in annexure referred to in Para-3 and Para-4 above, we are unable to ascertain and report the impact on the state of affairs / profitability on account of the following :-

a) Offices / projects outside India have not been visited by us. The value of work done, exchange fluctuations, other income / expenditure transactions and other balances in respect of foreign projects have been incorporated based on the records available at Head Office as received from these projects and as certified by the Management.

b) Adjustments that may arise on account of reconciliation and final settlement of accounts with various clients, PRWs, Suppliers and others (Refer Para 10 of Schedule 22).

c) There are outstanding dues on account of book debts amounting to Rs. 5601.01 lacs in respect of closed inland projects, which includes an amount of Rs. 1969.80 lacs under litigation/arbitration. The same have been shown as good for recovery. (Refer Para 5 of Schedule-22).

d) The accounts of Iraqi and Libyan projects have been translated into Indian currency at the effective buying rate prevailing as on 31.3.2001 (Refer Para 15 of Schedule 22).

e) Dues in respect of projects in Iraq amounting to a sum of Rs. 5234.41 lakhs are shown as good for recovery. (Refer para No.6 of Schedule-22).

f) Dues including security deposit in respect of Libyan projects amounting to Rs.5712.40 lacs are shown as good for recovery. ( Refer Para 7 & 8 of schedule 22)

g) Balances of Debtors, Creditors and loans and advances are subject to confirmation. (Refer Para 11 of Schedule 22).

h) In accordance with Para 17 of Schedule 22 regarding redemption of 7% non-cumulative preference shares same are redeemable in 10 years upto 31.03.2007.

i) The amount payable towards equity participation of NBCC in Joint Venture Co-Jamal-NBCC International Private Limited has not been accounted for. (Refer Para 23 of Schedule 22).

j) The company has written back certain old unclaimed credit balances of Rs.430.40 lacs based on review/assessment done by the management ( Refer Para 14 of schedule 22).

k) An amount of Rs. 1128.60 lacs lying with Rasheed Bank, Iraq has been shown as good for recovery. (Refer Para No. 3 of Schedule 22)

l) No provision has been made for penal levy amounting to Rs. 1531.19 lacs (including Rs. 63.58 lacs for the current year ) for guarantee given by the government for loans taken by the Corporation in view of issue being under dispute.

Subject to what is stated in paragraph 4(iv) (A) and paragraph (vi) (a) to (l), in our opinion and to the best of our information and according to the information and explanations given to us, the said accounts, read with notes thereon, give a true and fair view:-

a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2006 and

b) In the case of Profit & Loss Account, of the profit of the company for the year ended on that date.

c) In the case of the Cash-Flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph '3' of our report of even date)

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

(b) As explained to us, physical verification of fixed assets was conducted by the management at the end of the financial year.

(c) The company has not disposed off any substantial part of its fixed assets during the year, which may have any impact on the going concern nature of the company.

(ii) (a) According to information and explanations given to us, inventories have been physically verified during the year by management (except those lying with outside parties or under custody of clients).

(b) The procedures adopted for physical verification of inventory in our opinion are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has generally maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and these have been properly dealt with in the books of accounts.

(iii) (a) 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 Act. Therefore, the provisions of sub-clauses (a), (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company.

(b) The company has not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub-clauses (a), (b),(c) and (d) of clause 4(iii) of the order are not applicable to the company

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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. During the course of our audit, we have not observed any continuing major weakness in such internal controls.

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Act. Accordingly, clause 4(v) (b) of the Order is not applicable to the Company.

(vi) The company has not accepted any deposits under the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder.

(vii) On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of internal audit function carried out by the firms of Chartered Accountants appointed by the management is commensurate with the size of the company and the nature of its business.

(viii) We have been informed that the Central Govt. has not prescribed the maintenance of Cost Records under clause (d) of sub-section (I) of Section 209 of the Companies Act, 1956.

(ix) (a)According to the information and explanations given to us and the records of the Company examined by us, in our opinion, statutory dues like Sales Tax and Income Tax Deducted at source have been regularly deposited by the company with the appropriate authorities during the year. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales-tax, income-tax, customs duty, wealth tax, excise duty and cess as at 31st March, 2006 which have not been deposited on account of a dispute, are as follows :-

Nature of dues Amount due Forum where pending (Rs. in lacs)

Sales Tax 26.42 Commissioner (Sales Tax), Jaipur & Dy.Commissioner(Sales Tax), Lilabari (Guwahati)

Income Tax 47.79 Income Tax Appellate Tribunal (New Delhi)

(x) Accumulated losses of the Company as at March 31, 2006 does not exceeds the fifty percent of net worth of the Company as at that date. However, the Company has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to information and explanation given to us and the records examined by us, the company has defaulted in repayment of dues to Govt. of India in respect of interest on Government of India loan amounting to Rs. 6713.57 lacs.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of share, debentures and other securities except to its employees for vehicle against execution of necessary documents as per laid down policy of the Company.

(xiii) The Company is not a chit fund or a nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para - 4 of the order are not applicable to the company.

(xiv) As informed and explained to us, the Company has not dealt/traded in shares, securities, debentures and other investments except investments in fixed deposits with the banks. In our opinion and according to the information and explanations given to us proper records have been maintained for investments in fixed deposits and such fixed deposits have been held by the company, in its own name.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) As per information given to us the loan outstanding as at the end of the year were raised and utilized in the period prior to our audit. Hence we are unable to comment whether the same have been applied for the purpose for which they have been raised. The Company has not obtained any term loan during the year.

(xvii) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, We report that the company has not used funds raised on short term basis for long term investments and vice versa.

(xviii) According to information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us , the Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

(xx) According to the information and explanations given to us, the Company has not raised any fund by way of public issue.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance or fraud on or by the Company, notices or reported during the year, nor have we been informed of such case by the Management.



For Dinesh Mehta & Company

Chartered Accountants.

PLACE : NEW DELHI.

DATED : 11th July, 2006

(ANUP MEHTA)

PARTNER

M.No. 93133


Mar 31, 2005

We have audited the attached Balance Sheet of National Buildings Construction Corporation Limited as at 31st March,2005 and also the Profit & 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.

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 misstatements. 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 the Management, as well as evaluating the over-all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on matters specified in paragraphs 4 & 5 of the said Order.

2. Further to our comments in the annexure referred to in paragraph-1 here in above and subject to what is stated here in below vide paragraph-3, we report that:-

a) We have obtained all information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the Company in so far as appears from our examination of the books.

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

d) In our opinion, Balance Sheet and Profit & Loss Account have been drawn in accordance with the Accounting Standards referred to clause 3(c) of Section 211 of the Companies Act, 1956 except for Accounting Standards in respect of the following matters:

i) Accounting policy No.6(a)(iii) has been followed in preference to Accounting Standard-11 (AS-11) Accounting for the Effects of changes in Foreign Exchange Rates issued by the Institute of Chartered Accountants of India regarding conversion of accounts of Libyan and Iraqi Projects into Indian Currency. (Refer Para-3(a)(iv) below).

ii) No provision has been made for foreseeable losses which is not in agreement with Accounting Standard 7(AS 7) Accounting for Construction Contracts (Refer Para 3(b)(i) below)

e) Since Section 274(1)(g) of the Companies Act, 1956 is not applicable to the Government Companies, as per Notification No.GSR 829(E) dated 21.10.2003 issued by Department of Companies Affairs, we have no comments regarding disqualification for appointment of directors.

3) Further to our comments in annexure referred to in Para-1 and Para-2 above, we report as under:-

a) We are unable to ascertain and report the impact on the state of affairs/profitability on account of the following:-

i) Office/projects outside India have not been visited by us. The value of work done, exchange fluctuations, other income / expenditure transactions and other balances in respect of foreign projects have been incorporated based on the records available at Head Office as received from these projects and as certified by the Management.

ii) Adjustments that may arise on account of reconciliation and final settlement of accounts with various clients, PRWs, Suppliers and others (Refer Para 12 of Schedule 22).

iii) There are outstanding dues on account of book debts amounting to Rs.61,32,23 thousands in respect of closed inland projects, which includes an amount of Rs.24,88.23 thousand under litigation/arbitration. The same have been shown as good for recovery. (Refer Para 6 of Schedule-22).

iv) The accounts of Iraqi and Libyan projects have been translated into Indian Currency at the effective buying rate prevailing as on 31.03.2001 (Refer Para 18 of Schedule-22).

v) Dues in respect of projects in Iraq amounting to a sum of Rs.70,01,44 thousand are shown as good for recovery. (Refer Para No.7 of Schedule-22).

vi) Dues including security deposit in respect of Libyan projects amounting to Rs.57,12,40 thousand are shown as good for recovery. (Refer Para 8(i) and 9(i) of Schedule-22).

vii) Balances of Debtors, Creditors and loans and advances are subject to confirmation. (Refer Para 13 of Schedule-22).

viii) Para 21 of Schedule-22 regarding redemption of 7% non-cumulative preference shares.

ix) The amount payable towards equity participation of NBCC in Joint Venture Co-Jamal-NBCC International Private Limited has not been accounted for. (Refer Para 31 of Schedule-22).

x) The Company has written-back certain Old unclaimed credit balances of Rs.1,34,92 thousand based on review/ assessment done by the management (Refer Para 17 of Schedule-22).

xi) There are instances where penal action may be initiated by the concerned statutory authorities.

xii) The grant receivable from Govt. of India, Ministry of Urban Development for Rs.13,00,00 thousand has been considered receivable from Government in view of letter No.0-17031/22/80-PS dated 13.07.2005 confirming that the settlement of interest due is under consideration of the Government. (Refer Para No.10 Schedule-22).

xii) An amount of Rs.11,28,60 thousand lying with Rushed Bank, Iraq has been shown as good for recovery. ( Refer Para No.3 of Schedule-22)

xiii) The liability of Rs.7,63,08 thousand has not been considered in terms of sanction from the Government of India, Ministry of Urban Development. (Refer Para No.19 of Schedule -22).

xiv) No provision has been made for guarantee fees and penal levy amounting to Rs.22,50,35 thousand (including 1,27,17 thousand for current year) for guarantee given by the government for loans taken by the Corporation in view of issue being under dispute.

xv) Provision of Rs.22,55,29 thousand has not been considered because the award is under dispute and not acceptable to both the parties (Refer para 8(ii) and 9(ii) of Schedule-22).

xvi) Advances given by the Corporation to contractors for Libyan/Iraqi/Mauritius projects amounting to Rs.5,10,11 thousand are doubtful of recovery being under dispute/litigation/ arbitration. Moreover, there are advances amounting to Rs.90,30 thousand for Libyan Projects which are very old and no recovery made by the Corporation so far, though shown as good instead of doubtful.

b) Reference is invited to the Notes forming part of accounts for the year ended 31st March, 2005 (Schedule-22) and other points as mentioned here in below, for which neither expenditure was booked nor provision for liabilities made in the accounts:

i) Provision of Rs.2,81,62 thousand arising due to arbitration/court award has not been provided for in the accounts.

ii) No provision has been made for foreseeable losses of Rs.2,22,77 thousand as per Accounting Standard-7. (Refer Para 14 of Schedule- 22).

The effect of the various qualifications given above on the profit as well as assets and liabilities of the company could not be ascertained for want of details. However due to qualifications contained in Para No.3(b)(i) and (ii) the profit for the year is overstated by Rs.5,04,39 thousand, liabilities are under stated by Rs.2,22,77 thousand and assets are over stated by Rs.2,81,62 thousand.

Subject to what is stated in paragraph 2(d) (i) and 2(d)(ii) and paragraph 3(a)(i) to (xvii) and 3(b)(i) & (ii) supra, in our opinion and to the best of our information and according to the information and explanations given to us, the said accounts, read with notes thereon, give a true and fair view:-

i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March,2005 and

ii) In the case of Profit & Loss Account, of the profit of the company for the year ended on that date.

iii) In the case of the Cash-Flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS'S REPORT

(Referred to in paragraph '1' of our report of even date)

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

(b) According to information and explanations given to us, the fixed assets were physically verified by the Management at the end of the financial year. Physical verification report of fixed assets is pending reconciliation with the book records.

(c) Although some of the fixed assets have been disposed of during the year. In our opinion and according to the information and explanations given to us, the ability of the Company to continue as a going concern is not affected.

(ii)(a) According to information and explanations given to us, inventories have been physically verified during the year by management (except those lying with outside parties or under custody of clients).

(b) The procedures adopted for physical verification of inventory in our opinion are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has generally maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and these have been properly dealt with in the books of accounts.

(iii) The company has neither granted nor taken any loans, secured or unsecured to / from companies, firms or other parties covered in the register maintained under section 301 of the Act. Since the Company has neither granted nor taken any loans, secured or unsecured to / from companies firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, accordingly, clause 4(iii)(b)(c) and (d) of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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. Further on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control procedures.

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Act. Accordingly, clause 4(v) (b) of the order is not applicable to the Company.

(vi) The company has not accepted any deposits under the provisions of Section 58A and 58AA of the Act and the rules framed thereunder.

(vii) On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of internal audit function carried out by the firms of Chartered Accountants appointed by the management is commensurate with the size of the company and the nature of its business.

(viii) We have been informed that the Central Govt. has not prescribed the maintenance of Cost Records under clause (d) of sub-section(I) of section 209 of the Act.

(ix)(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, certain undisputed statutory dues like Sales Tax and Income Tax Deducted at source have not been regularly deposited by the company with the appropriate authorities during the year. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales-tax, income- tax, customs duty, wealth tax, excise duty and cess as at 31st March,2005 which have not been deposited on account of a dispute, are as follows:-

Nature of Amount Forum where dues due pending (Rs. in '000)

Sales Tax 1792 Commissioner (Sales Tax), Raipur

Income Tax 4741 Income Tax Appellate Tribunal(Delhi)

(x) Accumulated losses of the Company as at March 31, 2005 exceeds the net worth of the Company as at that date. However, the Company has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to information and explanation given to us and the records examined by us, the company has defaulted in repayment of dues to bank and Govt. of India in respect of the following:-

Name of Bank/ Nature of Amount Financial Inst. payment (Rs. in '000)

Syndicate Bank Interest on 4,82,90 Delhi. Spl.Rupee loan Govt. of India Interest on GOI 67,13,57 Loan

Govt. Bodies Interest 5,60,00 accrued and due

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of share, debentures and other securities except to its employees for vehicle against execution of necessary documents as per laid down policy of the Company.

(xiii) The Company is not a chit fund or a nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para-4 of the order are not applicable to the company.

(xiv) As informed and explained to us, the Company has not dealt/traded in shares, securities, debentures and other investments except investments in fixed deposits with the banks. In our opinion and according to the information and explanations given to us proper records have been maintained for investments in fixed deposits and such fixed deposits have been held by the company, in its own name.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) As per information given to us the loan outstanding as at the end of the year were raised and utilized in the period prior to our audit. Hence we are unable to comment whether the same have been applied for the purpose for which they have been raised. The Company has not obtained any term loan during the year.

(xvii) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, We report that the company has not used funds raised on short term basis for long term investments and vice versa.

(xviii) According to information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered under Section 301 of the Companies' Act, 1956.

(xix) According to information and explanations given to us, the Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

(xx) According to the information and explanations given to us, the Company has not raised any fund by way of public issue.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance or fraud on or by the Company, notices or reported during the year, nor have we been informed of such case by the Management.

For Dinesh Mehta & Company Chartered Accountants

Place: New Delhi Sd/-

Date: 25.07.2005 (ANUP MEHTA) PARTNER Membership No.93133


Mar 31, 2004

We have audited the attached Balance Sheet of National Buildings Construction Corporation Limited as at 31st March, 2004 and also the Profit & 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.

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 misstatements. 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In accordance with the provisions of Section 227 of the Companies Act, 1956, we report as under:

1. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on matters specified in paragraphs- 4 & 5 of the said Order.

2. The accumulated losses of the Corporation stand at Rs. 89,82,62 thousands as on 31.03.2004. The Corporation has defaulted in timely discharge of statutory dues, repayment of banks and financial institutions loans and interest thereon and Government loan instalments.

3. Further to our comments in annexure referred to in Para-1 and Para-2 above, we report as hereunder.

a) We are unable to ascertain and report the impact on the state of affairs / profitability on account of the following.

i) Offices / projects outside India have not been visited by us. The value of work of done, exchange fluctuations, other income/expenditure transactions and other balances in respect of foreign projects have been incorporated based on the records available at Head Office as received from these projects and as certified by the Management.

ii) Adjustments that may arise on account of reconciliation and final settlement of accounts with various clients, PRWs, Suppliers and others (Refer Para 14 of Schedule 21).

iii) There are outstanding dues on account of book debts amounting to Rs.33,12,30 thousands in respect of closed inland projects which are not under arbitration disputes and are very old. These have been shown as good for recovery.

iv) A sum of Rs. 6,75,70 thousands has been shown as advance turnover tax, adjustment of which in the books of accounts, would be made on final assessment.

v) The accounts of Iraqi & Libyan projects have been translated into Indian - currency at the effective buying rate prevailing as on 31.03.2001 (Refer Para 20 of Schedule 21)

vi) Bank balances in Iraq and outstanding dues including security deposits with clients in respect of projects completed in Iraq & Libya, realisations of which are subject to lifting of sanctions and outcome of negotiation with the two countries. (Refer Paras 4, 9, 10 (i) and 11 (i) of Schedule 21).

vii) The Company has written-back certain old unclaimed credit balances without proper identification, based on the review/assessment done by the management, as not payable (Refer para 19 of Schedule-21).

viii) Balances of Debtors, Creditors and loans & advances are subject to confirmation. (Refer Para 15 of Schedule 21)

ix) In the absence of working of billwise/agewise details of dues, we are unable to verify the classification of Sundry Debtors under 'more than six months & others'.

x) Corporation has transferred its consultancy and overhead expenses of Rs. 68,71 thousands, being 10% of the prime cost, to the value of work done in respect of MPLADS Gujarat School Works, awarded by the Government of India. These expenses were met by the Corporation out of interest on advance money receipt from the Government of India which had been kept in fixed deposits with banks. Confirmation from the Government for such utilisation by the Corporation is pending.

xi) Non-deduction of tax on amounts payable to professionals, contractors, rent etc. at the time of credit.

xii) Para 26 of Schedule 21 regarding redemption of 7% non cumulative preference shares.

xiii) Inventory worth Rs. 1,30,00 thousands which are surplus to the requirement of certain units, have been transferred to the stockyard at Ghitorni, Delhi and lying in the open unreconciled/unverified. There is a considerable diminution in the value of this stock, financial impact of which is yet to be ascertained by the Corporation.

xiv) Current liabilities do not include amount payable towards equity participation of NBCC in Joint Venture Co -Jamal-NBCC International Private Limited (Para 30 of Schedule 21).

xv) The company has not identified those fixed assets which are not in active use. As per AS-10 Material items retired from active use and held for disposal should be stated at the lower of their net book value and net realisable value and shown separately in the financial statements. Non-adherence to the requirements of AS-10 resulted in Fixed Assets (Gross Block in Active use) being overstated.

xvi) The accounting policy (Reference 9 of Schedule 20 and para 24 of Schedule 21) has been changed to make provision for leave encashment and gratuity in respect of all the employees on actuarial valuation. The impact of this change is unascertainable.

xvii) Corporation has reconstructed a bridge on Daman Ganga for which Value of work done booked during the year was for Rs. 4,82,00 thousand. It is reported that the bridge has recently collapsed. Further liability of the Corporation in this respect is not known.

xviii) Loans and advances include Rs. 2,37,44 thousands for expenses and other loans to Staff for which adjustments have not been made.

b) Reference is invited to the Notes forming part of accounts for the year ended 31st March, 2004 (Schedule 21) and other points as mentioned here in below, for which neither expenditure was booked nor provision for liabilities made in the accounts:

i) Para 3 regarding non-provision against inventory valuing Rs. 21,89 thousands and plant and machinery valuing Rs. 2,08 thousands which are impounded and under the custody of the clients.

ii) Current assets representing outstanding book debts/advances/ security deposits etc. in respect of closed inland projects due from clients/contractors amounting to Rs. 34,63,43 thousands are under litigation / arbitration. Further, current assets amounting to Rs. 87,75 thousands recoverable from parties / clients are in dispute. Corporation has shown these dues as good for recovery and has not made any provision.

iii) Included in sundry debtors of a running project is an amount of Rs.6,64,27 thousands which has not been accepted by the client, but this amount is still shown as good instead of doubtful.

iv) Para 10(ii) and 11 (ii) regarding amounts recoverable from Airport Authority of India (AAI) Rs. 14,06,78 thousands and Rs. 10,24,57 thousands respectively, thus aggregating to Rs. 24,31,35 thousands in respect of Libyan projects, which were subject matter for arbitration. The arbitration award had since been obtained in favour of the Corporation for amounts aggregating to Rs. 1,76,06 thousands only. Balance amount of Rs. 22,55,29 thousands is not recoverable, though this amount has been shown as good for recovery.

v) Advances given by the Corporation to contractors for Libyan / Iraqi / Mauritius projects amounting to Rs. 5,10,11 thousands are doubtful of recovery being under dispute / litigation / arbitration. Moreover, there are advances amounting to Rs. 90,30 thousands for Libyan projects which are very old and no recovery made by the Corporation so far, though shown as good instead of doubtful.

vi) There are arbitration awards against the Corporation and favouring contractors amounting to Rs. 49,10 thousands in respect of which the Corporation did not give effect in the accounts.

vii) Para 27 regarding non-provision of interest amounting to Rs.6,32,14 thousands on special rupee loan from the Syndicate Bank.

viii) Para 8 in respect of 1,89,54 thousands withheld by the clients on account of liquidated damages for delay in completion of projects.

ix) Para 16(i) regarding foreseeable losses on contracts which have been worked out to be Rs. 9,33,19 thousands.

x) Para 12 regarding amount of Rs. 13,00,00 thousands receivable from Ministry of Urban Development & Poverty Alleviation, towards grant for repayment of OIDB loan.

xi) Para 21 in respect of interest of Rs. 46,15,39 thousands (including Rs. 6,12,54 thousands for the current year) payable on land cost at Pragati Vihar, New Delhi which has not been paid / provided in terms of the allotment letter.

xii) Para 22 regarding reversal of a sum of Rs.7,63,08 thousands in 2000-2001 being liability to the Ministry of Urban Development without the Ministry's approval for waiver of such liability.

xiii) Provision has not been made for non payment of guarantee fees and penal levy amounting to Rs. 21,23,18 thousand (including Rs. 1,27,17 thousand for the current year) in respect of guarantee given by the Government for loans taken by the Corporation.

xiv) Provision has not been made for stamp duty of Rs. 20,44 thousands in respect of land at Ghitorni resulting understatement of fixed assets and current liabilities.

xv) Corporation has shown ex-gratia expenses to VRS employees amounting to Rs. 1,22,03 thousands as current year expenses instead of prior period expenses.

xvi) Value of work done includes sale of real estate to a party for Rs. 4,29,88 thousand without executing deed of sale / agreement to sell and even delivery of possession by 31st March, 2004. This has resulted in the overstatement of value of work done by Rs. 4,29,88 thousands and corresponding expenses by Rs. 78,16 thousands.

xvii) Accounting policy relating to the value of work done ( Para 2 of Schedule 20) is not in conformity with the Para 30(a) of AS-7 as laid down by the Institute of Chartered Accountants of India. It includes Rs. 2,36,78 thousands value of which was taken in respect of costs incurred in the year in connection with future activity on contracts. This has resulted in overstatement of VWD by Rs. 2,36,78 thousands, overstatement of expenses by Rs. 1,59,92 thousands and consequential overstatement of profit by Rs. 76,86 thousands.

xviii) Value of work done is overstated by Rs. 45,17 thousands which are neither admissible by nor probable of recovery from the client.

xix) Balances lying with Canara Bank and Syndicate Bank London at the year end have not been translated at the closing rate, thus resulting in excess bank balance by Rs. 4,41 thousand.

4. Subject to the above.

a) We have obtained all information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the Company in so far as appears from our examination of the books.

c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

d) In our opinion, Balance Sheet & Profit & Loss Account have been drawn in accordance with the Accounting Standards referred to clause 3(c) of Section 211 of the Companies Act, 1956 except for Accounting Standards in respect of the following matters:

i) AS-5-Refer Para 3(b)(xv)

ii) AS-7-Refer Para 3(b)(viii), 3(b)(ix), 3(b)(xvii) & 3(xviii)

iii) AS-9-Refer Para 3(b)(xvi)

iv) AS-11 -Refer Paras 3(a)(v) & 3(b)(xix)

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Accounting Policies and notes thereon give the information required by the Companies Act, 1956 in the manner so required. In respect of observations contained in Paragraph 3(a), we are unable to express our opinion regarding effect on the accounts in respect of the matter specified therein. Further, due to impact of qualifications contained in paragraph 3(b)(i) to (xix) profit of Rs. 14,97,20 thousands shall be converted into loss of Rs.97,97,94 thousands and in addition there will be prior period loss of Rs. 68,85,62 thousands. The total net current assets would have been (-) Rs. 42,31,35 thousands (as against the reported figure of Rs. 139,65,91 thousands) and the net fixed assets would have been Rs. 10,03,36 thousands (as against the reported figure of Rs. 9,86,86 thousands). The accumulated losses would have been Rs. 271,63,38 thousands (as against the reported figure of Rs. 89,82,62 thousands). Accordingly, considering the effect of aforesaid qualifications, we report that the said accounts do not reflect a true and fair view:

i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2004 and

ii) In the case of Profit & Loss Account, of the profit disclosed for the year ended on that date.

iii) In the case of the Cash Flow statement, of the cash flow for the year ended on that date.

5. As per information provided to us, the provisions of section 274(1)(g) of the Companies Act, 1956 are not applicable to the Directors of the Company in view of CL V General Circular No.8/2002 dated 22.03.2002.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 'I' of our report of even date)

(i) (a) The company has generally maintained proper records to show full particulars including quantitative details and situation of fixed assets.

(b) According to information and explanations given to thus, the fixed assets (except those under custody of clients) were physically verified by the management at the end of the financial year. Physical verification report of fixed assets is pending for reconciliation with the book records.

(c) Substantial part of fixed assets has not been disposed of by the company during the year.

(ii) (a) According to information and explanations given to us, physical verification of inventory is conducted at the year end (except those lying with outside parties or under custody of clients) by a team of officials. However, no such physical verification and reconciliation had taken place in respect of materials lying at the company's main stockyard at Ghitorni, Delhi (refer para 3(a)(xiii) of audit report).

(b) The procedures adopted for physical verification of inventory are generally reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has generally maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and these have been properly dealt within the books of accounts.

(iii) The company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedure 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, except in respect of acquisition of motor vehicles and other assets at the cost of contractor in one of the units. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of section 301 of the Act. However, the company does not maintain any register as required under section 301 of the Act.

(vi) The company has not accepted any deposits under the provisions of section 58-A and 58AA of the Act and the rules framed there under.

(vii) Internal audit department is headed by a senior officer, but for the purpose of internal audit work, staff are drawn from the other departments specially from the finance department, hence to this extent the internal audit is not fool proof. Running units have not been adequately covered under Internal Audit purview during the year. Follow-ups of the reports are not prompt enough. In our opinion, internal audit system needs to be strengthened and improved commensurate with the size of the company and nature of its business.

(viii) We have been informed that the Central Government has not prescribed the maintenance of Cost Records under clause (d) of sub-section(I) of section 209 of the Act.

(ix) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, certain undisputed statutory dues like Provident Fund, Sales Tax and Income Tax Deducted at Source have not been regularly deposited by the company with the appropriate authorities during the year. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the company. Further the company is not required to remit any amount to Investor Education and Protection Fund.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales-tax, income tax, customs duty, wealth tax, excise duty and cess as at 31st March, 2004 which have not been deposited on account of a dispute, are as follows:

Nature of dues Amount due Forum where pending (Rs. in '000)

Sales Tax 65,60 Commissioner (Sales Tax), Jaipur

(x) The accumulated losses of the Company stand at Rs. 89,82,62 thousands as at 31st March, 2004 and such accumulated losses are more than fifty percent of its net worth. The Company has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) The company has defaulted in repayment of dues to bank and Govt. of India. The period and amount of default is as under:

Name of Bank / Financial Nature of payment Amount Institution (Rs. in '000) (Rs. in '000)

Syndicate Bank, Delhi Interest on Special Rupee Loan 4,82,90 Govt. of India GOI Loan 53,70,84 Govt. Bodies Interest accrued and due 4,60,00

(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.

(xiii) The company is not a chit fund or a nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para 4 of the order are not applicable to the company.

(xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments except investments in fixed deposits with the banks for which proper records have been maintained of the transactions and such fixed deposits have been held by the company, in its own name.

(xv) The company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The company has not obtained any term loan during the year.

(xvii) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short-term basis which have been used for long-terms investment and vice versa.

(xviii) The company has not made any preferential allotment of shares during the year to parties and companies covered under section 301 of the Companies' Act, 1956.

(xix) The company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

(xx) The company has not made any public issue of any securities during the year and therefore the question of disclosing the end-use of money raised by any public issue does not arise.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For Jindal & Company

Chartered Accountants

Sd/-

(AKHIL JINDAL)

Partner

Place: New Delhi

Dated: 25.08.2004

 
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