Mar 31, 2017
TO
THE MEMBERS OF SHREE RAM URBAN INFRASTRUCTURE LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of SHREE RAM URBAN INFRASTRUCTURE LIMITED ("the Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and 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 Statement
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.
This responsibility also includes maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company, and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
In conducting our audit we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of 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 Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of 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 standalone financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.
Basis for Qualified Opinion
We refer to:
I. Note No. 43 to the standalone financial statements, the Company received an order on fire refuge area passed by the Municipal Corporation of Greater Mumbai (MCGM) dt.31.08.2016 against which NGO, Janhit Manch has filed Public Interest Litigation (PIL) in the Hon''ble Bombay High Court and the court has restrained the Municipal Commissioner from acting on the fire refuge order. Further, the MCGM has passed an order on regularization of the Public Parking Lot fixing premium/regularization charges. The Company''s SLP is also pending before the Apex Court against the order of Hon''ble Bombay High court dt.27-01-2016. Consequently, till the outcome of the judgment from Apex Court, we are unable to comment upon the financial impact of the same on the financial statements over and above the premium/ regularization charges confirmed by MCGM.
II. Note No.46 to the standalone financial statements, regarding non provision of interest under subvention scheme amounting to Rs.73,48,22,190/-, as the Company is in negotiation with the fund provider for waiver/reduction of interest and does not anticipate subvention interest liability. Had the subvention interest provided, the Loss for the current year would have been higher by Rs.29,59,84,153/-, Construction Work in Progress would have been higher by Rs. 43,88,38,037/-and the Current Liabilities would have been higher by Rs.73,48,22,190/- and Reserves and Surplus would have been lower by Rs.29,59,84,153/-.
III. Note No.49 to the financial statements, the outstanding balances of loans and advances and trade payables amounting to Rs. 13,56,38,289/- (P.Y. Rs. 17,73,32,033/-) and Rs.24,28,72,164/- (P.Y.Rs.39,08,50,730/-) respectively, are subject to confirmation and reconciliation. The consequential adjustments if any, arising out of these are not quantifiable.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31,2017 and its loss and cash flows for the year ended on that date
Emphasis of Matter
We draw attention to:
1. Note No. 44 to the standalone financial statements, inventory includes Imported Materials for the Construction Project of the Company, amounting to Rs. 15,77,11,694 /- is lying in Custom Warehouse since 2013, however, the Company has confirmed that the quality of the material is unaffected and hence no provision is required to be made.
2. Note No. 45 to the standalone financial statements in respect of pending winding up petitions against the company and the matters being subjudice, the company is taking necessary steps for settlement.
3. Note No. 47 to the standalone financial statements, regarding modification in rate of interest on Debenture from 20.20% p.a. to 0.01 % p.a. during the year, accordingly, the Company has provided interest at the said modified rate. If the original rate of interest had been continued the provision towards interest on debenture would have been higher by Rs. 43,33,04,021/Our opinion is not qualified in respect of the matters stated above.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and except for the possible effects of the matters described under "Basis for qualified opinion" paragraph, 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) Except for the possible effects of the matter described in the "Basis for qualified opinion" paragraph, 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, 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, except for the possible effects of the matter described in the "Basis for qualified opinionâ paragraph, 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 representations received from the directors as on March 31,2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2017, from being appointed as a director in terms of section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B â and
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us:
i) The Company has disclosed the impact of pending litigation on its financial position in its financial statements- Refer Note 20 to the standalone financial statements;
ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
iii) There were no amounts which required to be transferred to the Investors Education and Protection Fund by the Company.
iv) The Company has provided requisite disclosures in its standalone financial statements as regards its holdings as well as dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the Novembers, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on the audit procedures performed and the representations provided to us by the Management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the management. Refer Note 37 to the standalone financial statements.
ANNEXURE-A TO THE INDEPENDENT AUDITORS''REPORT
(Referred to In paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
I) In respect fits fixed assets:
a) The Company has maintained proper records showing particulars including quantitative details and situation of fixed assets.
b) The fixed assets were physically verified during the year by the Management in accordance with a programme of verification which, in our opinion provides for physical verification of all fixed assets at reasonable intervals. No material discrepancies were noticed on such verification.
c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii) As explained to us, the inventory has been physically verified during the year other than inventory lying at Customs. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on physical verification.
iii) The Company has granted unsecured loans to three bodies corporate listed in the register maintained under Section 189 of the Companies Act, 2013. (''the Act'').
a) In our opinion and according to the information and explanation given to us, the other terms and conditions for such interest free loans were not, prima facie, prejudicial to the interest of the Company.
b) In absence of any stipulations, the regularity of receipts of principal amount is not commented upon.
c) There are no overdue amounts in respect of the loan granted to the bodies corporate listed in the register maintained under section 189 of the Act.
iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186oftheActtotheextentapplicable.
v) The Company has not accepted any deposits from the public.
vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by Central Government of India, regarding the maintenance of cost records under subsection (1) of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii) In respect of statutory dues:
a) According to the information and explanations given to us, undisputed statutory dues including ''Tax Deducted at Source'', ''Interest on Tax deducted at source'', ''Service Tax'', ''Property Tax'', Custom Warehouse Rent'' and ''Interest on Custom Dutyâ have not been regularly deposited with the appropriate authorities and there have been delays in many cases.
b) According to the information and explanations given to us, undisputed statutory dues remaining unpaid for a period of more than six months from the date they became payable are as given below:
Name of the Statute |
Nature of the Dues |
Amount (In Rs.) |
Period to which the amount relates |
income Tax Act, 1961 |
Tax Deducted at Source |
76,92,012 |
March ,2015 to September, 2016 |
Interest on delay in deposit of Tax Deducted at Source |
10,45,000 |
February, 1998 to November, 1998 |
|
12,68,766 |
March, 2015 to September, 2016 |
||
Maharashtra Value Added Tax Act. 2002 |
Maharashtra Value Added Tax (including Interest) |
2.04,98,838 |
October, 2010 to September, 2016 |
Mumbai Municipal Corporation Act, 1888 |
Property Tax |
16,51,79,016 |
April, 2008 to September, 2016 |
Custom Act, 1962 |
Interest on Custom Duty |
1 88,07,434 |
May, 2013 to September, 2016 |
Custom Warehouse Rent |
35,80,713 |
March, 2013 to September, 2016 |
c) According to the information and explanations given to us, and the records examined by us, dues in respect of Income tax, Maharashtra Value Added Tax, Excise Duty, Custom duty and Service Tax as at March 31, 2017 that have not been deposited with the appropriate authority on account of any disputes and the forum where the dispute is pending areas under:-
Sr. No. |
Name of the Statute |
Nature of the Dues |
Period to which the amount relates |
Amount (Rs.) |
Forum where dispute is pending |
1 |
Income Tax Act, 1961 |
Income Tax |
April, 2002 to March, 2003 |
1,08,86,963 |
Assessing Authorities |
April, 2004 to March, 2005 |
8,74,93,855 |
Supreme Court |
|||
April, 2003 to March, 2009 |
17,62,020 |
income Tax Appellate Tribunal |
|||
April, 2008 to March, 2009 |
50,41,158 |
Commissioner of Income Tax (Appeal) |
|||
April, 2011 to March, 2012 |
18,31,05,565 |
Commissioner of Income Tax (Appeal) |
|||
April, 2012to March,2013 |
2,28,34,73,527 |
Commissioner of Income Tax (Appeal) |
|||
April.2013to March,2014 |
13,03,30,444 |
Commissioner of Income Tax (Appeal) |
|||
2 |
Income Tax Act, 1961 |
Demand against short deduction of tax at source and interest thereon |
April, 1999 to March, 2000 |
56,64,844 |
Commissioner of Income Tax (Appeal) |
April, 2000 to March, 2001 |
45,209 |
Income Tax Appellate Tribunal |
|||
April, 2001 to March, 2002 |
32,050 |
Income Tax Appellate Tribunal |
|||
April, 2009 to March, 2010 |
10,64,630 |
Commissioner of Income Tax (Appeal) |
|||
3 |
MVATAct,2002 |
MVAT and Interest |
April, 2007 to March, 2008 |
2,08,48,345 |
Commissioner of Sales Tax |
April, 2008 to March, 2009 |
83,49,216 |
Commissioner of Sales Tax |
|||
April.2010to March,2011 |
25,69,905 |
Commissioner of Sales Tax |
|||
April,2012toMarch2013 |
8,46,95,499 |
Commissioner of Sales Tax |
4 |
Central Excise Act, 1944 |
Excise Duty |
October, 2000 |
3.39,250 |
Customs, Excise and Service Tax Appellate Tribunal |
5 |
Service Tax |
Service Tax |
April, 2010 to March, 2013 |
6,28,91,213 |
Commissioner of Service |
under Finance |
Interest |
July,2010to March,2013 |
8,47,40,911 |
Tax |
|
Act, 1994 |
Service Tax |
April,2013to March.2014 |
49,06,841 |
Commissioner of Service Tax |
|
Interest |
April, 2013 to March, 2014 |
37,99,299 |
In process of filing reply to Commissioner of Service Tax. |
||
Service Tax |
April, 2014 to March, 2015 |
12,79,14,388 |
Commissioner of |
||
Interest |
April, 2014 to March, 2015 |
5,94,43,286 |
Service Tax |
||
6 |
Customs Act, 1962 |
Custom Duty |
July. 2008 |
6,98,250 |
Customs, Excise and Service Tax Appellate Tribunal |
viii) Based on our audit procedures and according to the information and explanations given to us, there have been defaults in the repayments of dues to the financial institutions and debenture holder as mentioned below:-
Particulars |
Amount of Default as at the Balance Sheet date (Principal Amount) |
Period of Default {Principal Amount) |
Interest |
Period of Default (Interest) |
Remarks |
1. Financial Institutions-a. SREI Equipment Finance Ltd. (NBFC) |
Nil |
0-3 months |
2,66,61.703 (Gross) |
0-3 Months |
Delay in repayment of interest which were outstanding as on March 31. 2017 (continuing default) |
b. India Bull Housing Finance Ltd. |
90.83.33.333 33.33.33.334 |
0-3 months 3-6 months |
12,74,55.694 19,97,98,559 |
0-3 months 3-6 Months |
All Defaults during the year were made good on or before March 31, 2017 except repayment of principal of Rs.16,66,66,667/- which was due on March 01, 2017 (continuing default) |
With regard to repayment of dues to Debenture holders, we are informed that the Company has modified its terms of Issue of Debenture vide Memorandum of Understanding dt. 28-02-2017, executed between the Company and the Debenture Holders deferring its original term in respect of payment of interest and principal redemption in installment to the next five years with a condition that if the cash flow permits the Company will consider for prepayment. In view of the same, there are no instances of defaults in repayment of dues to debenture holders.
ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year and with regard to Term loan raised during the year, according to the information and explanation given to us, the term loans were applied for the purposes for which they were raised.
x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi) According to the information and explanations given to us, and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by provisions of section 197 read with ScheduleVoftheCompaniesAct,2013.
xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and section 188 of the Companies Act,2013, where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv) According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Annexure-B to the Independent Auditors'' Report
(Referred to in paragraph 1 (f) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 (âthe Act")
We have audited the internal financial controls over financial reporting of Shree Ram Urban Infrastructure Limited ("the Company") as of March 31,2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting ("the Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls, and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or frauds may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Basis for Qualified Opinion
According to the information and explanations given to us, and based on our audit, the internal financial control over financial reporting needs to be strengthened in respect of review control of periodic reconciliation of balances in parties account including timely resolution thereof, to the extent of such parties covered in the basis for qualified opinion of our main audit report, which could potentially result in the material misstatement in the value of Companyâs Loans and Advances and Trade Payables.
Opinion
In our opinion, except for the effects of the matter described above on the achievement of the objectives of the control criteria, the Company has maintained , in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For HABIB & Co.
Chartered Accountants
Firm Registration No. 103479W
(D. P. SHROFF)
Partner
Membership No. 045417
Place; Mumbai
Date : 27"''May, 2017
Mar 31, 2015
We have audited the accompanying financial statements of SHREE RAM
URBAN INFRASTRUCTURE LIMITED ("the Company"), which comprise the
Balance Sheet as at March 31, 2015, and the Statement of Profit and
Loss and Cash Flow Statement for the fifteen months ended March
31,2015, and a summary of the significant accounting policies and other
explanatory information.
Management's Responsibility for the Financial Statement
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act") read with the General Circular
8/2014 dated April 04, 2014 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
As mentioned in note no.37 the Company has not ascertained the
financial impact of the order of Municipal Commissioner which had
directed the Company to submit modified plans of its ongoing project.
The Company has filed a Writ Petition against the aforesaid order in
the Hon. Bombay High Court which is pending. On the Special Leave
Petition filed by a NGO in the Hon. Supreme Court, the apex court has
passed dissenting judgement and the matter is referred to three- judge
bench, which is pending. Based on legal opinion obtained by the
Company, it has a strong case and the financial impact if any, is not
likely to be material and has accordingly prepared its accounts on a
going concern basis. Consequently, till the outcome of the judgement
from various courts, we are unable to comment upon the financial impact
of the same on the financial statements.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the aforesaid
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
b) in the case of Statement of Profit and Loss, of the loss of the
Company for the fifteen months ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the fifteen months ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the 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, 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 Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956, read with General Circular
8/2014 dated April 04, 2014 issued by the Ministry of Corporate
Affairs.
e) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory
Requirements' section of Independent Auditors' Report to the members of
Shree Ram Urban Infrastructure Limited ("the Company") for the 15 month
ended March 31, 2015).
i) a) The Company has maintained proper records showing particulars
including quantitative details and location of fixed assets.
b) The Company has physically verified the fixed assets in accordance
with a programme of verification which in our opinion provides for
physical verification of all fixed assets at reasonable intervals. No
material discrepancies were noticed on such verification.
c) During the period, the Company has not disposed off any substantial
part of fixed assets.
ii) a) The management has conducted physical verification of the
inventory at reasonable intervals. In our opinion, the frequency of
physical verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, 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 has maintained proper records of the inventory
and no material discrepancies were noticed on physical verification of
inventory as compared to the book records.
iii) a) The Company has granted unsecured loans to two companies,
covered in the register maintained under Section 301 of the Companies
Act,1956.The maximum amount involved during the period was Rs.
13,54,05,000/- and the balance of loans granted to such companies as at
March 31, 2015 was Rs. 13,54,05,000/-.
b) In our opinion and according to the information and explanation
given to us, the terms and conditions for such interest free loans are
not prima facie prejudicial to the interest of the Company and the said
loan is repayable on demand. Accordingly the provision stated in
paragraph 4(iii)(c) of the order are not applicable.
c) There is no overdue amount in respect of loans granted to the above
parties.
d) The Company had taken unsecured loan from ten companies and issued
secured debentures to five companies covered in the register maintained
under section 301 of the Companies Act, 1956. The maximum amount
involved during the period was Rs.3,51,68,99,000/- and the balance of
loans taken from such companies as at March 31, 2015 was
Rs.3,43,93,99,000/-.
e) In our opinion and according to the information and explanation
given to us, the rate of interest and other terms and conditions on
unsecured loans taken and on issue of secured debentures are not prima
facie prejudicial to the interest of the Company.
f) According to the information and explanations given to us,
repayments of the principal and interest have been regularly made as
stipulated.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business,with regard
to the purchase of inventory, fixed assets and for sale of goods.During
the course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding value of Rupees five lakhs in
respect of any party during the period, have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) The Company has not accepted any deposits during the period from
the public within the meaning of the provisions of Section 58A, 58AA or
any other relevant provisions of the Companies Act, 1956 and the rules
made thereunder.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by Central Government of India,
regarding the maintenance of cost records under clause (d) of
subsection (1) of Section 209 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been maintained.
We have, however, not made a detailed examination of the records with a
view to determine whether they are accurate or complete.
ix) In respect of statutory dues:
a) According to the information and explanations given to us,
undisputed statutory dues including Tax Deducted at Source', 'Interest
on Tax deducted at source', 'Service Tax', 'Property Tax','Maharashtra
Value Added Tax (MVAT)', 'Interest on MVAT', 'Custom Warehouse Rent'
and 'Interest on Custom Duty' have not been regularly deposited with
the appropriate authorities and there have been delays in many cases.
b) According to the information and explanations given to us,
undisputed statutory dues remaining unpaid for a period of more than
six months from the date they became payable are as given below:
Name of the Nature of the Dues Amount(In Rs.)
Statute
Income Tax Act, Tax Deducted at Source 38,26,874
1961
Interest on late deposit of Tax 24,95,007
Deducted at Source
Maharashtra Value Maharashtra Value Added Tax 2,28,78,097
Added Tax Act, (Including Interest)
2002
Mumbai Municipal Property Tax 6,66,94,753
Corporation Act,
1888
Custom Act, 1962 Interest on Custom Duty 70,82,905
Custom Warehouse Rent 15,20,619
Name of the Statute Period to which the amount relates
Income Tax Act, March, 2014 to September, 2014
1961
March, 2014 to September, 2014
Maharashtra Value
Added Tax Act, October, 2010 to September, 2014
2002
Mumbai Municipal
Corporation Act, April, 2008 to September, 2014
1888
Custom Act, 1962 May, 2013 to September, 2014
March, 2013 to September, 2014
c) According to the information and explanations given to us, and the
records examined by us, dues in respect of Income tax, Maharashtra
Value Added Tax, Excise Duty, Custom duty and Service Tax as at March
31, 2015 that have not been deposited with the appropriate authority on
account of any disputes and the forum where the dispute is pending are
as under:-
Sr. Name of the Nature of the Dues Period to which
No. Statute the amount relates
1 Income Tax Act, Income Tax April, 2002 to
1961 March, 2003
April, 2003 to
March, 2004
April, 2004 to
March, 2005
April, 2008 to
March, 2009
April, 2008 to
March, 2009
April, 2011 to
March, 2012
2. Income Tax Act, Demand against April, 1999 to
1961 short deduction March, 2000
of tax at source April, 2000 to
and interest March, 2001
thereon April, 2001 to
March, 2002
April, 2008 to
March, 2009
April, 2009 to
March, 2010
3. MVAT Act,2002 MVAT and Interest April, 2007 to
March, 2008
April, 2008 to
March, 2009
April, 2010 to
March, 2011
4. Central Excise Excise Duty October, 2000
Act, 1944
5. Service Tax under Service Tax April, 2010 to
Finance Act, 1994 and Interest March, 2013
April, 2013 to
March, 2014
6. Customs Act, 1962 Custom Duty July, 2008
Sr. Name of the Amount Forum where dispute is
No. Statute (Rs.) pending
1 Income Tax Act, 1,08,86,963 Assessing Authorities
1961
78,87,855 Income Tax Appellate
Tribunal
8,74,93,855 Supreme Court
11,36,531 Income Tax Appellate
Tribunal
50,41,158 Commissioner of Income
Tax(Appeal)
20,21,05,570 Commissioner of Income
Tax(Appeal)
2. Income Tax Act, 56,64,844 Commissioner of Income
1961 Tax (Appeal)
45,209 Income Tax Appellate
Tribunal
32,050 Income Tax Appellate
Tribunal
5,41,250 Commissioner of Income
Tax (Appeal)
10,64,630 Commissioner of Income
Tax (Appeal)
3. MVAT Act,2002 2,48,67,155 Commissioner of Sales Tax
83,49,216 The Company is in process
of filing appeal before
the Commissioner of Sales
Tax
2,07,11,967 Commissioner of Sales Tax
4. Central Excise 3,39,250 Customs,Excise and
Act, 1944 Service Tax Appellate
Tribunal
5. Service Tax under 7,52,27,316 Commissioner of Service
Finance Act, 1994 Tax
49,06,841
6. Customs Act, 1962 6,98,250 Customs,Excise and
Service Tax Appellate
Tribunal
x) The accumulated losses at the end of the March 31, 2015 are less
than fifty per cent of its net worth. The Company has incurred cash
losses during the period ended on that date and in the immediately
preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institution or bank or debenture holders.
xii) Based on the information and explanations given to us, the Company
has not granted any loans and / or advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) The Company is not a Chit Fund Company or nidhi / mutual benefit
fund / society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
xv) According to the information and explanations given to us, the
Company has not given guarantee for loans taken by others from banks or
financial institutions.
xvi) In our opinion, the term loans raised during the period have been
applied for the purpose for which they were raised.
xvii) According to the information and explanations given to us and on
an examination of the Balance Sheet of the Company, we report that, on
an overall basis, funds raised on short-term basis have, prima facie,
not been used during the period for long-term investment.
xviii) During the period, the Company has not made preferential
allotment of equity shares to the 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, during
the period covered by our audit report, the Company has issued 27,000
Secured Redeemable Non Convertible Debentures ("Debentures") of face
value Rs.1,00,000/- each aggregating to Rs.2,70,00,00,000/- on a
private placement basis and the security or charge has been created.
xx) During the period covered by our Audit Report the Company has not
raised any money by public issues.
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For HABIB & Co.
Chartered Accountants
Firm Registration No. 103479W
(D. P. SHROFF)
Partner
Membership No. 045417
Place : Mumbai
Date : 27th May, 2015
Dec 31, 2013
We have audited the accompanying financial statements of SHREE RAM
URBAN INFRASTRUCTURE LIMITED ("the Company"), which comprise the
Balance Sheet as at December 31, 2013, and the Statement of Profit and
Loss and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statement
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 and in accordance
with the accounting principles generally accepted in India. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
As mentioned in note no. 36 the Company has not ascertained the
financial impact of the order of Municipal Commissioner which had
directed the Company to submit modified plans of its ongoing project.
The Company has filed a Writ Petition against the aforesaid order in
the Hon. Bombay High Court. The Company is also contesting a Special
Leave Petition filed by a NGO in the Hon. Supreme Court in the same
matter. Based on legal opinion obtained by the Company, it is confident
of a favorable outcome and has accordingly prepared its accounts on a
going concern basis. Consequently, we are unable to comment upon the
financial impact of the same on the financial statements.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the aforesaid
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at December 31, 2013;
b) in the case of Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the 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, 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 Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in subsection (3C) of section 211 of 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;
e) On the basis of written representations received from the directors
as on December 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on December 31, 2013, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Act.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of Independent Auditors'' Report to the members of
Shree Ram Urban Infrastructure Limited ("the Company") for the year
ended December 31, 2013)
i) a) The Company has maintained proper records showing particulars
including quantitative details and location of fixed assets.
b) The Company has physically verified the fixed assets in accordance
with a programme of verification which in our opinion provides for
physical verification of all fixed assets at reasonable intervals. No
material discrepancies were noticed on such verification.
c) During the year, the Company has not disposed off any substantial
part of fixed assets.
ii) a) The management has conducted physical verification of the
inventory at reasonable intervals. In our opinion, the frequency of
physical verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, 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 has maintained proper records of the inventory
and no material discrepancies were noticed on physical verification of
inventory as compared to the book records.
ii) a) The Company has not granted loans to companies, firms or other
parties covered in the register maintained under Section 301 of the
Act. Accordingly, the provisions of sub-clause (b) to (d) of clause
(iii) of the paragraph 4 of the order are not applicable.
b) The Company had taken unsecured loan and debenture application money
from six companies covered in the register maintained under section 301
of the Companies Act, 1956. The maximum amount involved during the year
was Rs. 2,82,11,49,000/- and the year-end balance of loans taken from
such companies was Rs. 2,80,53,49,000/-.
c) In our opinion and according to the information and explanation
given to us, the rate of interest and other terms and conditions on
which these unsecured loans and debenture application money have been
taken are not prima facie prejudicial to the interest of the Company
d) According to the information and explanations given to us,
repayments of the principal and interest have been regularly made as
stipulated.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business, with
regard to the purchase of inventory, fixed assets and for sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding value of Rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules made
there under.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by Central Government of India,
regarding the maintenance of cost records under clause (d) of
subsection (1) of Section 209 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been maintained.
We have, however, not made a detailed examination of the records with a
view to determine whether they are accurate or complete.
ix) In respect of statutory dues:
a) According to the information and explanations give to us, undisputed
statutory dues including ''Tax Deducted at Source'', ''Interest on Tax
deducted at source'', ''Service Tax'', ''Property Tax'', ''Maharashtra Value
Added Tax (MVAT)'', ''Interest on MVAT, ''Custom Warehouse Rent'' and
''Interest on Custom Duty'' have not been regularly deposited with the
appropriate authorities and there have been delays in many cases.
b) According to the information and explanations given to us,
undisputed statutory dues remaining unpaid for a period of more than
six months from the date they became payable are as given below:
Name of the Nature of the Dues Amount Period to which
Statue the amount
(In Rs.) relates
Income Tax Act,
1961 Tax Deducted at
Source 1,07,000 April 2013
Interest on
late deposit of
Tax 30,72,815 December 2012 to
Deducted at Source June 2013
Maharashtra
Value Maharashtra Value
Added Tax 2,00,57,960 October 2010
to
Added Tax Act,
2002 (Including
Interest) June 2013
Mumbai
Municipal Property Tax 4,73,10,395 April 2008 to
Corporation
Act, 1888 March 2013
Custom Act,
1962 Interest on
Custom Duty 2,50,037 May 2013 to
June 2013
Custom
Warehouse Rent 2,31,072 March 2013 to
June 2013
c) According to the information and explanations given to us, and the
records examined by us, dues in respect of income tax, excise duty and
custom duty as at 31st December, 2013 that have not been deposited with
the appropriate authority on account of any disputes and the forum
where the dispute is pending are as under:-
Sr. Name of the Nature of Period to Amount Forum where
No. Statute the Dues which the (Rs.) dispute is
pending
amount
relates
1 Income Tax Act, Income
Tax April 2002 to 1,32,11,576 Bombay
Hight
Court
1961 March 2003
April 2003 to 1,00,62,829 Bombay
Hight
Court
March 2004
April 2003 to 78,87,855 Commiss
-ioner
of Income
March 2004 Tax
(Appeal)
April 2003 to 21,47,021 Bombay
High
Court
March 2004
April 2004 to 8,74,93,855 Bombay
High
Court
March 2005
April 2006 to 5,29,944 Income
Tax
Appellate
March 2007 Tribunal
April 2006 to 78,16,396 Commissi
-oner of
March 2007 Income
Tax
(Appeal)
April 2008 to 11,36,531 Income
Tax
Appellate
March 2009 Tribunal
2 Income Tax Act,
1961 Demand
against April 1997 to 10,45,000 Commissi
-oner of
Income
short
deduction March 1998 Tax
(Appeal)
of tax
at source April 1999 to 56,64,844 Commissi
-oner of
Income
and
interest March 2000 Tax
(Appeal)
thereon April 2000 to 1,66,319 Company is
in process
of
March 2001 filling
appeal to
Income
Tax
Appellate
Tribunal
April 2001 to 1,30,815 Company is
in process
of
March 2002 filling
appeal to
Income Tax
Appellate
Tribunal
April 2008 to 87,78,230 Commissi
-oner of
Income
March 2009 Tax
(Appeal)
April 2009 to 10,64,630 Commissi
-oner of
Income
March 2010 Tax
(Appeal)
3 Central
Excise Excise Duty October 2000 3,39,250 Customs,
Excise
and
Act, 1944 Service
Tax
Appellate
Tribunal
4 Customs Custom Duty July 2008 6,98,250 Customs,
Excise
and
Act,1962 Service
Tax
Appellete
Tribunal
x) The accumulated losses at the end of the financial year are less
than fifty per cent of its net worth. The Company has incurred cash
losses during the financial year covered by our audit but has not
incurred cash losses in the immediately preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institution or bank.
xii) Based on the information and explanations given to us, the Company
has not granted any loans and / or advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) The Company is not a Chit Fund Company or nidhi / mutual benefit
fund / society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
xv) 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) In our opinion, the term loans raised during the year have been
applied for the purpose for which they were raised.
xvii) According to the information and explanations given to us and on
an examination of the Balance Sheet of the Company, we report that, on
an overall basis, funds raised on short-term basis have, prima facie,
not been used during the year for long-term investment.
xviii) During the year, the Company has not made preferential allotment
of equity shares to the 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, during
the year covered by our audit report, the Company has received
application money towards 27,000 Secured Redeemable Non Convertible
Debentures ("Debentures") of face value Rs.1,00,000/- each aggregating
to Rs.2,70,00,00,000/- on a private placement basis. The Company is in
process of allotment and creation of security for the said debentures.
xx) During the year covered by our Audit Report the Company has not
raised any money by public issues.
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For KHANDELWAL JAIN & Co. For HABIB & Co.
Chartered Accountants Chartered Accountants
Firm Registration No. 105049W Firm Registration No. 103479W
(NARENDRA JAIN) (D. P. SHROFF)
Partner Partner
Membership No. 048725 Membership No. 045417
Place : Mumbai Place : Mumbai
Date : 1st March, 2014 Date : 1st March, 2014
Dec 31, 2012
1. We have audited the attached Balance Sheet of SHREE RAM URBAN
INFRASTRUCTURE LIMITED as at 31st December 2012 and also the Statement
of Profit and Loss and the Cash Flow Statement of the Company 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 from 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 management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003, and
read with the amendments made by the Companies (Auditor''s Report)
(Amendment) Order 2004, issued by the Central Government of India in
terms of sub section (4A) of section 227 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 information and
explanation given to us we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order to the extent
they are applicable to the Company.
4. Further to our comments in the Annexure referred to in Paragraph 3
above, we report that :
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company, so far as appears from our examination of
such 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 Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956;
(e) On the basis of the written representations received from the
Directors as on 31st December, 2012 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st December, 2012 from being appointed as a Director in terms of
Clause (g) of Sub-section (1) of Section 274 of the Companies Act,
1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with
notes thereon give the information required by the Companies Act, 1956,
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st December, 2012;
(ii) in the case of the Statement of Profit and Loss, of the Profit of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT
(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE TO THE MEMBERS
OF SHREE RAM URBAN INFRASTRUCTURE LIMITED FOR THE YEAR ENDED 31st
DECEMBER, 2012)
i) a) The Company has maintained proper records showing particulars
including quantitative details and location of fixed assets.
b) The Company has physically verified the fixed assets in accordance
with a programme of verification which in our opinion provides for
physical verification of all fixed assets at reasonable intervals. No
material discrepancies were noticed on such verification.
c) During the year, the Company has not disposed off any substantial
part of fixed assets.
ii) a) The management has conducted physical verification of the
inventory at reasonable intervals. In our opinion, the frequency of
physical verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, 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 has maintained proper records of the inventory
and no material discrepancies were noticed on physical verification of
inventory as compared to the book records.
iii) a) The Company has not granted loans to companies, firms or other
parties covered in the register maintained under Section 301 of the
Act. Accordingly, the provisions of sub-clause (b) to (d) of clause
(iii) of the paragraph 4 of the order are not applicable.
b) The Company had taken unsecured loan from six companies covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 8,33,99,000 and the
year-end balance of loans taken from such companies was Rs.
7,33,99,000.
c) In our opinion and according to the information and explanation
given to us, the loans taken are interest free and the other terms and
conditions on which these loans have been taken are not prima facie
prejudicial to the interest of the Company.
d) The principal amount of loan taken is repayable on demand. The
Company is regular in repayment of principal whenever such demand has
been made.
iv) In our opinion, and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business, with
regard to the purchase of inventory, fixed assets and for sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding value of Rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules made
thereunder.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by Central Government of India,
regarding the maintenance of cost records under clause (d) of
subsection (1) of Section 209 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been maintained.
We have, however, not made a detailed examination of the records with a
view to determine whether they are accurate or complete.
ix) In respect of statutory dues:
a) According to the information and explanations given to us, and the
records examined by us, generally the Company is regular in depositing
with appropriate authorities undisputed statutory dues including
provident fund, employee''s state insurance, income-tax, wealth tax,
service tax, Maharashtra Valued Added Tax (MVAT), custom duty, Tax
deducted at source, property tax, works contract tax, cess and other
statutory dues except that there have been delays in few cases, in
depositing statutory dues in respect of ''TDS on contractor'', ''TDS on
interest'', Service Tax'', ''Property Tax'' and ''MVAT with the appropriate
authorities during the year. According to the information and
explanations given to us, there are no undisputed statutory dues
remaining unpaid for a period of more than six months from the date
they became payable.
b) According to the information and explanations given to us, and the
records examined by us, dues in respect of income tax, excise duty and
custom duty as at 31st December, 2012 that have not been deposited with
the appropriate authority on account of any disputes and the forum
where the dispute is pending are as under:-
Sr. Name of the Nature of Period to
No. Statute the Dues which the amount relates
1 Income Tax Act, Income Tax April 2002 to
1961 March 2003
April 2003 to March 2004
April 2003 to March 2004
April 2003 to March 2004
April 2004 to March 2005
April 2006 to March 2007
April 2008 to March 2009
2 Income Tax Act, 1961 Demand against April 1997 to
short deduction March 1998
of tax at
source and
interest April 1999 to
thereon March 2000
April 2000 to March 2001
April 2001 to March 2002
April 2008 to March 2009
April 2009 to March 2010
3 Central Excise
Act, 1944 Excise Duty October 2000
4 Customs Act, 1962 Custom Duty July 2008
Name of the Statute Amount Forum where
(Rs.) dispute is pending.
Income Tax Act, 1961 1,32,11,576 Bombay Hight Court
1,00,62,829 Bombay Hight Court
1,14,13,758 Commissioner of Income Tax (Appeal)
21,47,021 Bombay High Court
8,74,93,855 Bombay High Court
5,29,944 Income Tax Appellate Tribunal
55,49,260 Commissioner of Income Tax (Appeal)
Income Tax Act, 1961 1,14,95,000 Commissioner of Income Tax (Appeal)
56,64,844 Commissioner of Income Tax (Appeal)
1,18,815 Commissioner of Income Tax (Appeal)
1,78,319 Commissioner of Income Tax (Appeal)
87,78,230 Commissioner of Income Tax (Appeal)
22,60,270 Commissioner of Income Tax (Appeal)
Central Excise Act,1944 3,39,250 Customs, Excise and Service
Tax Appellate Tribunal
Customs Act, 1962 6,98,250 Customs, Excise and Service Tax
Appellate Tribunal
x) The accumulated losses at the end of the financial year are less
than fifty per cent of its net worth. The Company has not incurred cash
losses during the financial year covered by our audit and the
immediately preceeding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institution or bank.
xii) Based on the information and explanations given to us, the Company
has not granted any loans and / or advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) The Company is not a Chit Fund Company or nidhi / mutual benefit
fund / society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
xv) 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) In our opinion, the term loans raised during the year have been
applied for the purpose for which they were raised.
xvii) According to the information and explanations given to us and on
an examination of the Balance Sheet of the Company, we report that, on
an overall basis, funds raised on short-term basis have, prima facie,
not been used during the year for long-term investment.
xviii) During the year, the Company has not made preferential allotment
of equity shares to the parties and Companies covered in the register
maintained under section 301 of the Companies Act, 1956.
xix) In our opinion and according to the information and explanations
given to us, the Company has not issued any secured debentures during
the year covered by our report.
xx) During the year covered by our Audit Report the Company has not
raised any money by public issues.
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For KHANDELWAL JAfN & Co. For HABIB & Co.
Chartered Accountants Chartered Accountants
Firm Regn. No. 105049W Firm Regn. No. 103479W
(NARENORA JAIN) (D. P. SHROFF)
Partner Partner
Membership No. 048725 Membership No. 045417
Place : Mumbai Place : Mumbai
Date : 27th February, 2013 Date : 27th February, 2013
Dec 31, 2011
1. We have audited the attached Balance Sheet of SHREE RAM URBAN
INFRASTRUCTURE LIMITED as at 31st December 2011 and also the Profit and
Loss Account and the Cash Flow Statement of the Company 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 from 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 management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, and
read with the amendments made by the Companies (Auditor's Report)
(Amendment) Order 2004, issued by the Central Government of India in
terms of sub section (4A) of section 227 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 information and
explanation given to us we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order to the extent
they are applicable to the Company.
4. Further to our comments in the Annexure referred to in Paragraph 3
above, we report that :
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company, so far as appears from our examination of
such books;
(c) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956;
(e) On the basis of the written representations received from the
Directors as on 31st December, 2011 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st December, 2011 from being appointed as a Director in terms of
Clause (g) of Sub-section (1) of Section 274 of the Companies Act,
1956;
(f) Without qualifying our opinion, we draw attention to note no. 21 of
Schedule 19 regarding filing of an application for compounding of
offences u/s. 621A of the Companies Act, 1956 to avoid long drawn
litigation. Pending the outcome of the application, Company has
provided for an estimated liability of Rs. 22,60,000 towards the sum
payable for compounding;
(g) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with
significant accounting policies and notes thereon give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st December, 2011;
(ii) in the case of the Profit and Loss Account, of the Profit of the
Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE TO THE MEMBERS
OF SHREE RAM URBAN INFRASTRUCTURE LIMITED FOR THE YEAR ENDED 31st
DECEMBER, 2011)
i) a) The Company has generally maintained proper records showing
particulars including quantitative details and location of fixed
assets.
b) The Company has physically verified the fixed assets in accordance
with a programme of verification which in our opinion provides for
physical verification of all fixed assets at reasonable intervals. No
material discrepancies were noticed on such verification.
c) During the year, the Company has not disposed off any substantial
part of fixed assets.
ii) a) The management has conducted physical verification of the
inventory at reasonable intervals. In our opinion, the frequency of
physical verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, 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 has maintained proper records of the inventory
and no material discrepancies were noticed on physical verification of
inventory as compared to the book records.
iii) a) The Company has not granted loans to companies, firms or other
parties covered in the register maintained under Section 301 of the
Act. Accordingly, the provisions of sub-clause (b) to (d) of clause
(iii) of the paragraph 4 of the order are not applicable.
b) The Company had taken unsecured loan from four companies covered in
the register maintained under section 301 of the companies Act, 1956.
The maximum amount involved during the year was Rs. 5,33,99,000 and the
year- end balance of loans taken from such companies was Rs.
5,33,99,000.
c) In our opinion and according to the information and explanations
given to us, the loans taken are interest free and the other terms and
conditions on which these loans have been taken are not prima facie
prejudicial to the interest of the Company.
d) Since there is no repayment schedule in respect of aforesaid loans,
the question of repayment being regular does not arise.
iv) In our opinion, and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business, with
regard to the purchase of inventory, fixed assets and for sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding value of Rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules made
there under.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) According to the information and explanations given to us, the
Central Government has not prescribed for the maintenance of Cost
Records under Section 209(1 )(d) of the Companies Act, 1956 in respect
of the products of the Company.
a) According to the information and explanations given to us, and the
records examined by us, generally the Company is regular in depositing
with appropriate authorities undisputed statutory dues including
provident fund, employee's state insurance, income-tax, wealth tax,
service tax, sales tax, custom duty, Tax deducted at source, property
tax, works contract tax, cess and other statutory dues except that
there have been delays in few cases, in depositing statutory dues in
respect of 'TDS on contractor' with the appropriate authorities during
the year. According to the information and explanations given to us,
there were no other undisputed statutory dues which have remained
outstanding as at 31st December, 2011 for the period of more than six
months from the date they became payable.
b) According to the information and explanations given to us, and the
records examined by us, dues in respect of Income tax, excise duty and
custom duty as at 31st December, 2011 that have not been deposited with
the appropriate authority on account of any disputes and the forum
where the dispute is pending are as under:-
Sr. Name of the Nature of Period to Amount Forum where
No. Statute the Dues which the (Rs.) dispute is
pending
amount
relates
1 Income Tax
Act, Income
Tax April 2002
to 1,08,86,963 Bombay Hight
Court
1961 March 2003
April 2003
to 79,57,942 Bombay Hight
Court
March 2004
April 2004
to 8,74,93,855 Bombay High
Court
March 2005
April 2006
to 5,29,944 Income Tax
Appellate
March 2007 Tribunal
April 2008
to 90,49,260 Commissioner of
Income
March 2009 Tax (Appeal)
2 Income
Tax Act,
1961 Demand
against April 1997
to 10,45,000 Commissioner of
Income
short
deduction March 1998 Tax (Appeal)
of tax at
source
and inte
rest
thereon
April 1999
to 56,64,844 Commissioner of
Income
March 2000 Tax (Appeal)
April 2000
to 1,18,815 Commissioner of
Income
March 2001 Tax (Appeal)
April 2001
to 1,78,319 Commissioner of
Income
March 2002 Tax (Appeal)
April 2008
to 87,78,230 Commissioner of
Income
March 2009 Tax (Appeal)
April 2009 to 20,82,070 Commissioner of
Income
March 2010 Tax (Appeal)
3 Central Excise
Act, 1944 Excise
Duty October 2000 3,39,250 Customs, Excise
and Service
Tax Appellate
Tribunal
4 Customs
Act, 1962 Custom
Duty July 2008 6,98,250 Customs, Excise
and Service
Tax Appellate
Tribunal
ix) The accumulated losses at the end of the financial year are less
than fifty per cent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit. However it had
incurred cash losses in the immediately preceding financial year.
x) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank.
xi) Based on the information and explanations given to us, the Company
has not granted any loans and / or advances on the basis of security by
way of pledge of shares, debentures and other securities.
xii) The Company is not a Chit Fund Company or nidhi / mutual benefit
fund / society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
xiii) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
xiv) 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.
xv) In our opinion, the term loans raised during the year have been
applied for the purpose for which they were raised.
xvi) According to the information and explanations given to us and on
an examination of the Balance Sheet of the Company, we report that, on
an overall basis, funds raised on short-term basis have, prima facie,
not been used during the year for long-term investment.
xvii) During the year, the Company has made preferential allotment of
1,60,84,678 equity shares at a price of Rs. 140 each pursuant to
conversion of convertible equity share warrant, to three companies
covered in register maintained under Section 301 of the Companies Act,
1956. In our opinion and according to the information and explanations
given to us, the price at which the said equity shares have been issued
is not prejudicial to the interest of the Company.
xviii) In our opinion and according to the information and explanations
given to us, the Company has not issued any secured debentures during
the year covered by our report.
xix) During the year covered by our Audit Report the Company has not
raised any money by public issues.
xx) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For KHANDELWAL JAIN & Co. For HABIB & Co.
Chartered Accountants, Chartered Accountants,
Firm's Registration No. 105049W Firm's Registration No. 103479W
(NARENDRA JAIN) (D. P. SHROFF)
PARTNER PARTNER
Membership No. 048725 Membership No. 045417
Place : Mumbai Place : Mumbai
Date : 27th February, 2012 Date : 27th February, 2012
Dec 31, 2010
1. We have audited the attached Balance Sheet of SHREE RAM URBAN
INFRASTRUCTURE LIMITED
(Formerly known as Shree Ram Mills Limited) as at 31st December 2010
and also the Profit and Loss Account and the Cash Flow Statement of the
Company for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the Companys
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 from 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 management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, and
read with the amendments made by the Companies (Auditors Report)
(Amendment) Order 2004, issued by the Central Government of India in
terms of Sub Section (4A) of Section 227 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 information and
explanation given to us we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order to the extent
they are applicable to the Company.
4. Further to our comments in the Annexure referred to in Paragraph 3
above, we report that :
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company, so far as appears from our examination of
such books;
(c) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956.
(e) On the basis of the written representations received from the
Directors as on 31st December, 2010 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st December, 2010 from being appointed as a Director in terms of
Clause (g) of Sub-Section (1) of Section 274 of the Companies Act,
1956;
(f) Without qualifying our opinion, we draw attention to note no. 22 of
Schedule 20 regarding filing of an application for compounding of
offences u/s. 621A of the Companies Act, 1956 to avoid long drawn
litigation. Pending the outcome of the application, company has
provided for an estimated liability of Rs. 16,45,500 towards the sum
payable for compounding.
(g) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with
significant accounting policies and notes thereon give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st December, 2010;
(ii) in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE TO THE MEMBERS
OF SHREE RAM URBAN INFRASTRUCTURE LIMITED (Formerly known as Shree Ram
Mills Limited) FOR THE YEAR ENDED 31st DECEMBER, 2010)
i) a) The Company has generally maintained proper records showing
particulars including quantitative details and location of fixed
assets.
b) The Company has physically verified the fixed assets in accordance
with a programme of verification which in our opinion provides for
physical verification of all fixed assets at reasonable intervals. No
material discrepancies were noticed on such verification.
c) During the year, the Company has not disposed off any substantial
part of fixed assets.
ii) a) The management has conducted physical verification of the
inventory at reasonable intervals. In our opinion, the frequency of
physical verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, 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 has maintained proper records of the inventory
and no material discrepancies were noticed on physical verification of
inventory as compared to the book records.
iii) a) The Company has not granted loans to companies, firms or other
parties covered in the register maintained under Section 301 of the
Act. Accordingly, the provisions of sub-clause (b) to (d) of clause
(iii) of the paragraph 4 of the order are not applicable.
b) The Company has taken unsecured loan from six companies covered in
the register maintained under Section 301 of the companies Act, 1956.
The maximum amount involved during the year was Rs. 63,76,16,893 and
the year end balance of loans taken from such companies was Rs.
5,33,99,000.
c) In our opinion and according to the information and explanation
given to us, the loans taken are interest free and the other terms and
conditions on which these loans have been taken are not prima facie
prejudicial to the interest of the Company.
d) Since there is no repayment schedule in respect of aforesaid loans,
the question of repayment being regular does not arise.
iv) In our opinion, and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business, with
regard to the purchase of inventory, fixed assets and for sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding value of Rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules made
thereunder.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) According to the information and explanations given to us, the
Central Government has not prescribed for the maintenance of Cost
Records under Section 209(1 )(d) of the Companies Act, 1956 in respect
of the products of the Company.
a) According to the information and explanations given to us and the
records examined by us, generally the Company is regular in depositing
with appropriate authorities undisputed statutory dues including
provident fund, employees state insurance, income-tax, wealth tax,
service tax, sales tax, custom duty, tax deducted at source, property
tax, works contract tax, cess and other statutory dues except that
there have been delays in few cases, in depositing statutory dues in
respect of Tax deducted at source, TDS on works contract tax under
MVAT Act, Property Tax, Wealth Tax and Service Tax with the
appropriate authorities during the year. According to the information
and explanations given to us, there were no other undisputed statutory
dues which have remained outstanding as at 31st December, 2010 for the
period of more than six months from the date they became payable.
b) According to the information and explanations given to us, and the
records examined by us, dues in respect of income tax, water tax,
sewerage tax, property tax, excise duty and custom duty as at 31st
December, 2010 that have not been deposited with the appropriate
authority on account of anv disputes and the forum where the dispute is
oendina are as under:-
Sr. Name of the Nature of Period to
No. Statute the Dues which the
amount relates
1 Income Tax Act, Income Tax April 03 to
1961 March 04
April 06 to
March 07
2 Brihanmumbai Water Tax April 09 to
Mahanagar Dec 10
Palika (B.M.C.)
3 Brihanmumbai Sewerage Tax April 09 to
Mahanagar Dec 10
Palika
(B. M. C.)
4 Brihanmumbai Property Tax April 08 to
Mahanagar Dec 10
Palika
(B. M. C.)
5 Central Excise Excise Duty Oct 2000
Act 1944
6 Customs Act, Custom Duty July 2008
1962
Sr. Amount Forum where
No. (Rs.) dispute is pending
1 79,57,942 Bombay Hight Court
5,29,944 CIT (Appeal) March 07
2 64,12,770 B. M. C.
3 38,47,662 B. M. C.
4 2,54,84,173 B. M. C.
5 3,39,250 Superintendant of
Central Excise
6 6,98,250 Deputy Commissionner
of Customs
ix) The accumulated losses at the end of the financial year are more
than fifty per cent of its net worth. The company has incurred cash
losses during the financial year covered by our audit. It had also
incurred cash losses in the immediately preceding financial year.
x) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank.
xi) Based on the information and explanations given to us, the Company
has not granted any loans and / or advances on the basis of security by
way of pledge of shares, debentures and other securities.
xii) The Company is not a Chit Fund Company or nidhi / mutual benefit
fund / society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
xiii) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
xiv) 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.
xv) In our opinion, the term loans raised during the year have been
applied for the purpose for which they were raised.
xvi) According to the information and explanations given to us and on
an examination of the Balance Sheet of the Company, we report that, on
an overall basis, funds raised on short-term basis have, prima facie,
not been used during the year for long-term investment.
xvii) During the year, the Company has made preferential allotment of
1,15,84,678 convertible equity share warrants at a price of Rs. 140
each, carrying an option to subscribe to equivalent number of equity
shares of Rs. 10 each, to three companies covered in register
maintained under Section 301 of the Companies Act, 1956. In our opinion
and according to the information and explanation given to us, the price
at which the said convertible equity share warrants have been issued is
not prejudicial to the interest of the company.
xviii) In our opinion and according to the information and explanations
given to us, the Company has not issued any secured debentures during
the year covered by our report.
xix) During the year covered by our Audit Report the Company has not
raised any money by public issues.
xx) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For KHANDELWAL JAIN & Co. For HABIB & Co.
Chartered Accountants, Chartered Accountants,
Firms Registration No. 105049W Firms Registration No. 103479W
(NARENDRA JAIN) (D. P. SHROFF)
PARTNER PARTNER
Membership No. 048725 Membership No. 045417
Place : Mumbai Place : Mumbai
Date : 14th May, 2011 Date : 14th May, 2011
Dec 31, 2009
1. We have audited the attached Balance Sheet of SHREE RAM URBAN
INFRASTRUCTURE LIMITED (Formerly Known As Shree Ram Mills Limited) as
at 31st December 2009 and also the Profit & Loss Account and the Cash
Flow Statement of the Company for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
Companys 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 from 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 management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, and
read with the amendments made by the Companies (Auditors Report)
(Amendment) Order 2004, issued by the Central Government of India in
terms of sub section (4A) of section 227 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 information and
explanation given to us we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order to the extent
they are applicable to the Company.
4. Further to our comments in the Annexure referred to in Paragraph 3
above, we report that :
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company, so far as appears from our examination of
such books;
(c) The Balance Sheet, the Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Profit & Loss Account and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956.
(e) On the basis of the written representations received from the
Directors as on 31st December, 2009 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st December, 2009 from being appointed as a Director in terms of
Clause (g) of Sub-section (1) of Section 274 of the Companies Act,
1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with
significant accounting policies and notes thereon, give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st December, 2009;
(ii) in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE TO THE MEMBERS
OF SHREE RAM URBAN INFRASTRUCTURE LIMITED (Formerly Known As Shree Ram
Mills Limited) FOR THE YEAR ENDED 31st DECEMBER, 2009)
i) a) The Company has generally maintained proper records showing
particulars including quantitative details and location of fixed
assets.
b) The Company has physically verified the fixed assets in accordance
with a programme of verification which in our opinion provides for
physical verification of all fixed assets at reasonable intervals. No
material discrepancies were noticed on such verification.
c) During the year, the Company has not disposed off any substantial
part of fixed assets.
ii) a) The management has conducted physical verification of the
inventory at reasonable intervals. In our opinion, the frequency of
physical verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, 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 has maintained proper records of the inventory
and no material discrepancies were noticed on physical verification of
inventory as compared to the book records.
iii a) The Company has not granted loans to companies, firms or other
parties covered in the register maintained under Section 301 of the
Act. Accordingly, the provisions of sub-clause (b) to (d) of clause
(iii) of the paragraph 4 of the order are not applicable.
b) The Company has taken unsecured loan from six companies covered in
the register maintained under section 301 of the companies Act, 1956.
The maximum amount involved during the year was Rs.82,74,16,893/- and
the year end balance of loans taken from such companies was
Rs.63,76,16,893/-.
c) In our opinion and according to the information and explanation
given to us, the loans taken are interest free and the other terms and
conditions on which these loans have been taken are not prima facie
prejudicial to the interest of the Company.
d) Since there is no repayment schedule in respect of aforesaid loans,
the question of repayment being regular does not arise.
iv) In our opinion, and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business, with
regard to the purchase of inventory, fixed assets and for sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v) a) On the basis of the audit procedures performed by us, and
according to the information, explanation and representations made to
us, we are of the opinion that, the transactions in which the directors
were interested as contemplated under section 297 and section 299 of
the Companies Act, 1956 and which were required to be entered in the
register maintained in section 301 of the said Act, have been so
entered.
b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding value of Rupees five lakhs in
respect of any party during the year, have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules made
thereunder.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) According to the information and explanations given to us, the
Central Government has not prescribed for the maintenance of Cost
Records under Section 209(1 )(d) of the Companies Act, 1956 in respect
of the products of the Company.
a) According to the information and explanations given to us, and the
records examined by us, generally the Company is regular in depositing
with appropriate authorities undisputed statutory dues including
provident fund, employees state insurance, income-tax, wealth tax,
service tax, sales tax, custom duty, Tax deducted at source, works
contract tax, cess and other statutory dues except that there have been
delays in some cases, in depositing statutory dues in respect of Tax
deducted at source, TDS on works contract tax under MVAT Act and
wealth tax with the appropriate authorities during the year. According
to the information and explanations given to us, there were no other
undisputed statutory dues which have remained outstanding as at 31st
December, 2009 for the period of more than six months from the date
they became payable except for wealth tax amounting to Rs.91,285/ -
which has since been paid.
b) According to the information and explanations given to us, and the
records examined by us, dues in respect of Income tax, water tax,
sewerage tax, property tax, excise duty and custom duty as at 31st
December, 2009 that have not been deposited with the appropriate
authority on account of any disputes and the forum where the dispute is
pending are as under:-
Sr. Name of the Nature of Period to
No. Statute the Dues which the
amount relates
1 Income Tax Act, Income Tax Asst. year
1961 2007-08
2 Brihanmumbai Water Tax April 09 to
Mahanagar Dec 09
Palika (B. M. C.)
3 Brihanmumbai Sewerage Tax April 09 to
Mahanagar Dec 09
Palika (B. M. C.)
4 Brihanmumbai Property Tax April 08 to
Mahanagar Dec 09
Palika (B. M. C.)
5 Central Excise Excise Duty Oct 2000
Act, 1944
6 Customs Act, 1962 Custom Duty July 2008
Name of the Amount Forum where
Statue (Rs.) dispute is pending
Income Tax Act,
1961 10,60,944/- CIT (Appeal)
(since then paid
Rs.5,31,000/-on
18th Feb, 2010)
Brihanmumbai
Mahanagar
Palika (B. M. C.) 27,48,330/- B. M. C.
Brihanmumbai
Mahanagar
Palika (B. M. C.) 16,48,998/- B. M. C.
Brihanmumbai
Mahanagar
Palika (B. M. C.) 1,60,35,383/- B. M. C.
Central Excise
Act, 1944 3,39,250/- Superintendant of
Central Excise
Customs Act, 1962 6,98,250/- Deputy Commissionner
of Customs
ix) The Company has no accumulated losses as at the end of the
financial year. The company has incurred cash losses during the
financial year covered by our audit. However it had not incurred cash
losses in the immediately preceding financial year.
x) Based on the examination of the books of account and related records
and according to the information and explanations given to us, 7
instances of delays were noted in payment of interest on loans to a
bank ranging from 5 days to 126 days with amounts varying from
Rs.2,02,07,333/- to Rs. 2,27,74,384/-.
xi) Based on the information and explanations given to us, the Company
has not granted any loans and/ or advances on the basis of security by
way of pledge of shares, debentures and other securities.
xii) The Company is not a Chit Fund Company or nidhi / mutual benefit
fund / society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
xiii) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
xiv) 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.
xv) In our opinion, the term loans raised during the year have been
applied for the purpose for which they were raised.
xvi) According to the information and explanations given to us and on
an examination of the Balance Sheet of the Company, we report that, on
an overall basis, funds raised on short-term basis have, prima facie,
not been used during the year for long-term investment.
xvii) During the year, the Company has made preferential allotment of
45,00,000 convertible equity share warrants at a price of Rs.140/-
each, carrying an option to subscribe to equivalent number of equity
shares of Rs.10/- each, to three companies covered in register
maintained under Section 301 of the Companies Act, 1956. In our opinion
and according to the information and explanation given to us, the price
at which the said convertible equity share warrants have been issued is
not prejudicial to the interest of the company.
xviii) In our opinion and according to the information and explanations
given to us, the Company has not issued any secured debentures during
the year covered by our report.
xix) During the year covered by our Audit Report the Company has not
raised any money by public issues.
xx) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For KHANDELWAL JAIN & Co. For HABIB & Co.
Chartered Accountants, Chartered Accountants,
Firms Registration No. 105049W Firms Registration No. 103479W
(NARENDRA JAIN) (D. P. SHROFF)
PARTNER PARTNER
Membership No. 048725 Membership No. 045417
Place : Mumbai Place : Mumbai
Date : 25th May, 2010 Date : 25th May, 2010
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