Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Nitesh Estates Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement, the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone Ind AS financial statements").
Management''s Responsibility for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (''the Act'') with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the Audit Report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS 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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of the affairs of the Company as at 31st March, 2018 and its loss, including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matter
1. The comparative financial information of the Company for the year ended March 31, 2017 and the transition date of opening balance sheet as at April 1, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006, audited by us and on which we expressed an unmodified opinions in the reports for the year ended March 31, 2017 and March 31, 2016 dated 27thMay, 2017and 28th May, 2016 respectively, as adjusted for the differences in accounting principles adopted by the Company on transition to the Ind AS which have been audited by us.
2. Refer Note no 47 of the Ind AS financial statements wherein it is noted that the management is in the process of refunding the advance booking received before applicability of RERA from the potential customers due to non-registration of projects under RERA and is in the process of complying with the pending requirements of RERA Act.
Our opinion is not modified in respect of this matter.
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 "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 obtained all the information and explanations except information related to deferred tax assets/ liabilities as stated in Note no 20(a), which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 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" and
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014,as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations against the Company on its financial position in its standalone Ind AS financial statements in respect of claims and demands on the Company which are being contested as mentioned in Note 34.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE"A" TO THE INDEPENDENT AUDITORS'' REPORT
The Annexure A referred to in our report to the members of NITESH ESTATES LIMITED under the heading ''Report on Other Legal and Regulatory Requirements of our report at even date.
We report that:
i. a) The Company has maintained proper records showing full particulars including quantitative details and situations of fixed assets.
b) According to the information and explanation given to us, some of the fixed assets have been physically verified by the Management during the year in a phased program and no material discrepancies were noticed on such verification. In our opinion, the frequency of such verification is reasonable having regard to the size of the company and the nature of its assets.
c) According to information and explanation given to us no immovable properties are held in the name of the company.
ii. The Company is engaged in the business of real estate development and related services and holds inventories in the form of land, developed and under development of properties. In our opinion and according to the information and explanations given to us, having regard to the nature of inventories, the procedures and frequency of the physical verification by way of title deeds, site visits by the management and certification of work completion are reasonable and adequate having regard to the size of the Company and the nature of its business.
iii. According to the information and explanation given to us, the Company has granted unsecured loans to companies, firms, or other parties as listed in the register maintained under Section 189 of the Companies Act, 2013 (Refer to Note 30 to the financial statements).In our opinion and according to the information and explanations given to us, the terms and conditions of the loans are not prejudicial to the Company''s interest.
iv. According to the information and explanation given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to loans and investments made.
v. The Company has not accepted any deposits during the year and so the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 are not applicable.
vi. The Central Government has prescribed for the maintenance of the cost records under Section 148(1) of the Companies Act, 2013 in respect of the products of the Company. Accordingly, the Management has appointed a Cost Auditor whose report is still awaited and could not be produced to us.
vii. (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Cess, Custom Duty, Goods and Services Tax (GST) and other statutory dues applicable to it.
There are no undisputed amounts payables in respect of provident fund, Employees'' State Insurance, Sales Tax, Service Tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities except GST of Rs. 6 Lakhs and Income Tax of Rs 488 Lakhs [Refer Note no 34 (a) (ii)] as at 31st March, 2018 for a period more than six months from the date they became due.
(b) According to the information and explanations given to us, the following are the disputed statutory dues which have not been deposited by the company as on 31st March, 2018.
Name of Statute |
Nature of Dues |
Period to which the amount relates |
Amount (Rs. in Lakhs) |
Forum where Disputes is Pending |
Income Tax Act, 1961 |
Income tax |
AY 2009-10 |
148 |
CIT- Appeal |
AY 2011-12 |
66 |
CIT-Appeal |
||
AY 2011-12 |
9 |
CIT- Appeal |
||
KAVAT Act |
VAT |
AY 2009-10 |
247 |
JCCT - Appeal |
AY 2011-12 |
421 |
DCCT-Audit |
||
AY 2012-13 |
1,655 |
DCCT-Audit |
||
AY 2013-14 |
118 |
DCCT-Audit |
Refer Note no 34 (a) (ii) to the notes to the financial statements for interest on income tax.
viii. According to the information and explanations given to us, the company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government. However, the Company has defaulted in repayment of principal and interest to debenture holders for an amount of Rs. 8311 Lakhs [Refer note 17(i)]. The Company has not taken any loans or borrowings from the government.
ix. The company has not raised money by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised.
x. According to the information and explanations given to us ,no fraud on or by the company has been noticed or reported during the year. Accordingly, the provisions of clause 3(x) of the said order are not applicable.
xi. According to the information and explanations give 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 provisions of section 197 read with Schedule V to the Act.
xii. 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 by the management all transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.
xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provision of clause 3(xiv) of the Order is not applicable.
xv. The company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provision of clause 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.Accordingly, the provision of clause 3(xvi) of the Order is not applicable.
''Annexure B'' to the Independent Auditor''s Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of NITESH ESTATES LIMITED ("the Company") as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls.
The Company''s 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 financial 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 controls 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 audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s 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 fraud 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.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company generally has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, 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 RAY& RAY
Chartered Accountants
Firm''s Registration No.301072E
Mrinal Kanti Banerjee
Partner
Membership No 051472
Place: Bangalore
Date: 30th May, 2018
Mar 31, 2016
To
The Members of
Nitesh Estates Limited Report on the Standalone Financial Statements
We have audited the accompanying financial statements of NITESH ESTATES LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles 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 adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone 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 financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit / loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015, (''the Order'') issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the said Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with in this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of written representations received from the Directors as on 31st March, 2016 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2016 from being appointed as 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"; and
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note 25 to the financial statements;
II. The Company has no material foreseeable losses, if any, on long-term contracts including derivative contracts .
III. The Company is not required to transfer any amount to the Investor Education and Protection Fund.
ANNEXURE A TO THE AUDITORS'' REPORT
The Annexure referred to in our report to the members of NITESH ESTATES LIMITED for the year ended March 31, 2016
We report that:
(i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) According to the information and explanation given to us, most of the fixed assets have been physically verified by the Management during the year and no material discrepancies were noted on such verification. In our opinion, the frequency of such verification is reasonable having regard to the size of the company and the nature of its assets.
(c) there are no immovable properties held in the name of the company.
(ii) The company is in the business of real estate development and related services and holds inventories in the form of land, properties under development and constructed properties. In our opinion and according to the information and explanations given to us, having regard to the nature of inventory, the procedures of physical verification by way of verification of title deeds, site visits by the Management and certification of extent of work completion by competent persons, are reasonable and adequate in relation to the size of the Company and the nature of its business
(iii) The Company has not granted any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
(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 186 of the Act, with respect to the loans and investments made.
(v) The Company has not accepted any deposits during the year and so the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under sub section (1) of Section 148 of the Companies Act, 2013 in respect of real estate and development activities and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.
(vii) (a) According to the information and explanations given to us, the company is generally regular in depositing undisputed
statutory dues including Provident Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues to the appropriate authorities.
There are no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues and other material statutory dues in arrears as at 31 March, 2016 for a period of more than six months from the date they became payable.
(b) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, or duty of customs or duty of excise or value added tax or cess which have not been deposited as on 31 March, 2016 on account of disputes are given below:
Name of the statute |
Nature of the dues |
Amount (Rs. in lakhs) |
Period to which amount Pertains |
Forum where Disputes is Pending |
Income Tax Act |
Income Tax |
22.50 |
AY-2011-2012 |
Asst Commissioner of Income Tax Appeals |
(viii) The company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.
(ix) The company has not raised any money raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised.
(x) No fraud on or by the company has been noticed or reported during the year;
(xi) No managerial remuneration has been paid or provided during the year.
(xii) Company is not a nidhi company.
(xiii) All transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;
(xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review;
(xv) The company has not entered into any non-cash transactions with directors or persons connected with him;
(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 Auditors'' Report- Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of NITESH ESTATES LIMITED ("the Company") as of 31 March 2016 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 Company''s 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 financial 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 controls 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 audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s 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 fraud 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. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, 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.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, 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 and on behalf of RAY & RAY
Chartered Accountants
Firm Registration No. 301072E
Mrinal Kanti Bandopadhyay
Partner
Membership No. 051472
Bangalore
28th May, 2016
Mar 31, 2015
We have audited the accompanying financial statements of Nitesh Estates
Limited ("the Company"), which comprise the Balance Sheet as at 31
March 2015, the Statement of Profit and Loss, the Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements on a going concern
basis 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 consistent application of appropriate
accounting policies and making judgments and estimates that are
reasonable and prudent; and design, implementation and maintenance of
adequate internal financial controls, that operate effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the company as
at 31st March, 2015 , and its profit and its cash flows for the year
ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required under provisions of Section 143 (3) of the Act, we
report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the aforesaid financial
statements comply with the Accounting Standards referred to in 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 31st March, 2015 taken on record by the Board of Directors, none
of the directors is disqualified as on 31st March, 2015 from being
appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors
) Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us :
i. The Company's observations on the impact of pending litigations on
its financial position in its financial statements mentioned in Note No
25 which as per their representation will have no material impact.
ii. The company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditor's Report
(Referred to in paragraph 1 of our report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(ii) The company is in the business of real estate development and
related services and holds inventories in the form of land, properties
under development and constructed properties. In our opinion and
according to the information and explanations given to us, having
regard to the nature of inventory, the procedures of physical
verification by way of verification of title deeds, site visits by the
Management and certification of extent of work completion by competent
persons, are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(iii) The Company has not granted any loans, secured or unsecured,
to/from companies, firms or other parties covered in the Register
maintained under Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under sub section (1) of Section 148 of the
Companies Act, 2013 in respect of real estate and development
activities and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records with a view to
determining whether they are accurate or complete. To the best of our
knowledge and according to the information and explanations given to
us, the Central Government has not prescribed the maintenance of cost
records for any other product of the Company.
(vii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty
of Excise, Value Added Tax, Cess and any other statutory dues with the
appropriate authorities
There are no undisputed amounts payable in respect of Provident Fund,
Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any
other statutory dues and other material statutory dues in arrears as at
31 March, 2015 for a period of more than six months from the date they
became payable.
(b) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,
or Duty of Customs or Duty of Excise or Value Added Tax or Cess which
have not been deposited as on 31 March, 2015 on account of disputes are
given below:
Name of the Nature of the Amount Period to which
statute dues (Rs. in lakhs) amount Pertains
Income Tax Act Income Tax 22.50 AY 2011-12
Finance Act, 1994 Service Tax 311.56 AY 2007-08
Name of the Forum where Disputes is Pending
statute
Income Tax Act Asst Commissioner of Income Tax
Appeals
Finance Act, 1994 CESTAT
(c) In our opinion and according to the information and explanations
given to us, there are no amounts which are required to be transferred
to Investor Education and Protection Fund in accordance with the
relevant provisions of the Companies Act, 1956 (1 of 1956) and rules
made there under.
(viii) The accumulated losses of the Company at the end of the
financial year are not more than fifty per cent of its net worth and
the Company has not incurred cash losses during the financial year
covered by our audit and in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not has defaulted in repayment of dues to
a financial institution or bank or debenture holders.
(x) In our opinion and according to the information and explanations
given to us, the Company had not given guarantees for loans taken by
others from banks or financial institutions.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained, other than temporary deployment pending
application.
(xii) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no fraud on the
Company has been noticed or reported during the year.
for RAY & RAY
Chartered Accountants
(Firm's registration number: 301072E)
Mrinal Kanti Bandyopadhyay
Partner
Membership No. 051572
Place: Bangalore
Date: 28 May 2015
Mar 31, 2014
We have audited the accompanying financial statements of Nitesh Estates
Limited ("the Company"), which comprise the balance sheet as at 31
March 2014, the statement of profit and loss and the cash fow statement
for the year then ended and a summary of significant accounting policies
and other explanatory information.
Management''s responsibility for the financial statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material 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 efectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by Management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our modifed audit opinion.
Basis for qualified Opinion
As stated in note 37 to the financial statements, the Company has
advanced an amount aggregating Rs 157,000,000 as at 31 March 2014, to
various parties for purchase/joint development of land/ properties.
Considering the timeline of these advances, the same should have been
converted into acquired land / joint development agreements or these
amounts should have been recovered. Management continues to believe
that these advances have been made to parties for which joint
development agreements / acquisition of land will be consummated and in
the event that it does not consummate, these advances can be recovered.
However, in the absence of sufcient documentation to justify the timing
around when these advances are capable of being converted into joint
development agreements / acquisition of land and considering that they
are not secured, we are unable to comment on the recoverability of
these advances and the consequential efect, if any, on the financial
statement for the year ended 31 March 2014.
qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the efects of the matter described
in the Basis for qualified Opinion paragraph, the financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
Auditor''s Report (Contd.)
(a) in the case of the balance sheet, of the state of afairs of the
Company as at 31 March 2014;
(b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(c) in the case of the cash fow statement, of the cash flows 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"), as amended, 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 fow
statement dealt with by this report are in agreement with the books of
account;
(d) except for the possible efect of the matter described in the Basis
for qualified Opinion paragraph in our opinion, the balance sheet, the
statement of profit and loss, and the cash fow statement comply with the
accounting standards referred to in sub- section (3C) of Section 211 of
the Companies Act, 1956; and
(e) on the basis of written representations received from the directors
as on 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
Annexure to the Independent Auditor''s Report
Annexure referred to in the Independent Auditors'' Report to the Members
of Nitesh Estates Limited ("the Company") for the year ended 31 March
2014. We report that:
1) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) The Company has a regular programme of physical verifcation of its
fixed assets by which all fixed assets are verifed in a phased manner
over a period of two years. In our opinion, this periodicity of
physical verifcation is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verifcation.
(c) The Company has not disposed any fixed assets during the year and
accordingly clause 4(i)(c) of the Order is not applicable.
2) The Company is in the business of real estate development and
related services and holds inventories in the form of land, properties
under development and constructed properties. Thus, paragraph 4(ii) of
the Order is not applicable.
3) The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956 during
the year. Accordingly paragraph 4(iii) is not applicable to the
Company.
4) In our opinion and according to the information and explanations
given to us there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of fixed assets, inventory and sale of goods and services.
We have not observed any major weakness in the internal control system
during the course of the audit.
5) (a) In our opinion, and according to information and explanations
given to us, the particulars of contracts or arrangements
referred to Section 301 of the Companies Act, 1956 have been entered in
the register required to be maintained under that Section.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs 5
lakh with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time except for sale of certain goods for the specialised
requirements of the buyers and for which suitable alternative sources
are not available to obtain comparable quotations. However, on the
basis of information and explanations provided, the same appear
reasonable.
6) The Company has not accepted any deposits from the public.
7) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records.
9) (a) According to the information and explanations given to us and on
the basis of our examination of the records of the
Company amounts deducted/accrued in the books of account in respect of
undisputed statutory dues including Provident Fund, Sales tax, Income
tax, Service tax, Employees State Insurance and other material
statutory dues have generally been regularly deposited with the
appropriate authorities. As explained to us, the Company did not have
any dues on account of Customs duty, Investor Education and Protection
Fund, Wealth tax, and Excise duty.
According to the information and explanations given to us no undisputed
amounts payable in respect of Provident Fund, Sales tax, Income tax,
Service tax, Employees'' State Insurance and other material statutory
dues were in arrears as at 31 March 2014 for a period of more than six
months from the date they became payable.
Annexure to the Independent Auditor''s Report (Contd.)
(b) According to the information and explanations given to us, the
following dues of Income tax and Service tax have not been deposited by
the Company on account of disputes. The Company does not have any
disputed dues in relation to sales tax.
Name of the Nature of Amount of tax Amount paid Period to which
statute the dues under dispute under protest the amount
(Rs.) (Rs.) relates
Income Tax Income tax 8,81,108 - AY 2011-12
Act, 1961
Finance Act, Service tax 31,156,450 - AY 2007-08
1994
Name of the Statute Forum where dispute is pending
Income Tax Act 1961 Commissioner of Income-tax (Appeals)
Finance Act 1994 Customs, Excise and Service Tax Appellate
Tribunal
10) The accumulated losses at the end of the financial year are less
than fifty percent of the net-worth of the Company. The Company has not
incurred cash losses in the current financial year. However, the Company
had incurred cash losses amounting to Rs 267,859,271 in the immediately
preceding financial year.
11) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers, debenture holders or to any financial institutions.
12) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/nidhi/mutual benefit
fund/society.
14) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15) According to the information and explanations given to us, the
Company has given guarantees for loans availed by subsidiary companies
amounting to Rs 3,400,000,000. In our opinion, the terms and conditions
on which these guarantees are given are prima facie not prejudicial to
the interest of the Company.
16) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
17) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that
funds raised on short-term basis have not been used for long-term
investment.
18) During the current year, the Company has not made any preferential
allotment of shares to companies/ firms/ parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
19) According to the information and explanations given to us, the
Company has created security or charge in respect of debentures
outstanding during the year.
20) The Company did not raise any money by public issues during the
year.
21) 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 B S R & Co. LLP
Chartered Accountants
Firm registration number: 101248W
Sampad Guha Thakurta
Partner
Membership No. 060573
Place: Bangalore
Date: 28 May 2014
Mar 31, 2013
Report on the fnancial statements
We have audited the accompanying fnancial statements of Nitesh Estates
Limited ("the Company"), which comprise the balance sheet as at 31
March 2013, the statement of proft and loss and the cash fow statement
for the year then ended and a summary of signifcant accounting policies
and other explanatory information.
Management''s responsibility for the fnancial statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance and the cash fows of the Company in accordance
with the Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the fnancial statements
that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these fnancial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the fnancial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the fnancial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by Management, as
well as evaluating the overall presentation of the fnancial statements.
We believe that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the fnancial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the balance sheet, of the state of afairs of the
Company as at 31 March 2013;
(b) in the case of the statement of proft and loss, of the loss for the
year ended on that date; and
(c) in the case of the cash fow statement, of the cash fows 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 specifed 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 proft and loss and the cash fow
statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the balance sheet, the statement of proft and loss
and the cash fow statement comply with the accounting standards
referred to in sub-section (3C) of section 211 of the Act, to the
extent applicable;
(e) on the basis of written representations received from the directors
as on 31 March 2013, and taken on record by the Board of Directors,
none of the directors is disqualifed as on 31 March 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure to the Auditors Report
Annexure referred to in our report to the Members of Nitesh Estates
Limited ("the Company") for the year ended 31 March 2013. We report
that:
1) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fxed
assets.
(b) The Company has a regular programme of physical verifcation of its
fxed assets by which all fxed assets are verifed in a phased manner
over a period of two years. In our opinion, this periodicity of
physical verifcation is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verifcation.
(c) The Company has not disposed any fxed assets during the year and
accordingly clause 4(i)(c) of the Order is not applicable.
2) The Company is in the business of real estate development and
related services and holds inventories in the form of land, properties
under development and constructed properties. Thus, paragraph 4(ii) of
the Order is not applicable.
3) (a) According to the information and explanations given to us, the
Company has granted interest-free advances in the nature of loans to
one party covered in the register maintained under section 301 of the
Companies Act, 1956. The maximum amount involved during the year was Rs
110,270 (previous year Rs 12,238,190) and the year-end balance was
Rs.nil (previous year Rs 110,270).
(b) In our opinion, the terms and conditions on which loans have been
given to companies, frms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956 are, prima
facie, not prejudicial to the interest of the Company.
(c) In the case of loans granted to parties listed in the register
maintained under section 301, there are no specifc covenants with
regard to the repayment. As informed to us, the party has repaid the
advances as demanded during the year, and thus, there has been no
default on the part of the party. The advances given are interest free.
(d) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured from companies,
frms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly paragraph 4(iii)(e) to (g)
of the Order is not applicable.
4) In our opinion and according to the information and explanations
given to us, and having regard to the explanation that sale of certain
goods are for the specialised requirements of the buyers and suitable
alternative sources are not available to obtain comparable quotations,
there is an adequate internal control system commensurate with the size
of the Company and the nature of its business with regard to purchase
of fxed assets and inventories and sale of goods and services. During
the course of our audit, we have not observed any major weakness in the
internal control system.
5) (a) In our opinion, and according to information and explanations
given to us, the particulars of contracts or arrangements referred to
section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that section.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs 5
lakh with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time except for sale of certain goods for the specialised
requirements of the buyers and for which suitable alternative sources
are not available to obtain comparable quotations. However, on the
basis of information and explanations provided, the same appear
reasonable.
6) The Company has not accepted any deposits from the public.
7) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records.
9) (a) According to the information and explanations given to us and on
the basis of our examination of the records of the Company amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Sales tax, Income tax, Service
tax, Employees State Insurance and other material statutory dues have
been regularly deposited with the appropriate authorities. As explained
to us, the Company did not have any dues on account of, Customs duty,
Investor Education and Protection Fund, Wealth-tax, and Excise duty.
According to the information and explanations given to us no undisputed
amounts payable in respect of Provident Fund, Sales tax, Income-tax,
Service tax and other material statutory dues were in arrears as at 31
March 2013 for a period of more than six months from the date they
became payable.
10) The accumulated losses at the end of the fnancial year are less
than ffty percent of the net-worth of the Company. However, the company
has incurred cash losses in the fnancial year amounting to Rs
267,859,271 and an amount of Rs 53,163,107 in the immediately preceding
fnancial year.
11) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers, debenture holders or to any fnancial institutions.
12) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/nidhi/mutual beneft
fund/society.
14) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15) According to the information and explanations given to us, the
Company has given guarantees for loans availed by subsidiary companies
amounting to Rs 1,020,000,000. In our opinion, the terms and conditions
on which these guarantees are given are prima facie not prejudicial to
the interest of the Company.
16) In our opinion and according to the information and explanations
given to us, the term loans taken by the company have been applied for
the purpose for which they were raised.
17) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that
funds raised on short-term basis have not been used for long-term
investments.
18) During the current year, the Company has not made any preferential
allotment of shares to companies/ frms/ parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
19) According to the information and explanations given to us, during
the period covered by our audit report, the company has issued 6,000,
18.5 % secured non-convertible debentures, of Rs 100,000 each
aggregating Rs 600,000,000. The Company has created a charge in respect
of the debentures issued.
20) The Company did not raise any money by public issues during the
year.
21) 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 B S R & Co.
Chartered Accountants
Firm registration
number: 101248W
Zubin Shekary
Partner
Membership No. 48814
Place: Bangalore
Date: 30 May 2013
Mar 31, 2012
1. We have audited the attached balance sheet of Nitesh Estates
Limited ('the Company') as at March 31, 2012 and also the statement of
Profit and loss and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4 and
5 of the said Order.
4. Without qualifying our opinion, we draw attention to:
a. Note 39 of the financial statements regarding advance against
property amounting to Rs.215,000,000 as at March 31, 2012 towards
purchase of land. The Company has initiated legal proceedings in
respect of the aforesaid arrangement. Pending the ultimate outcome of
the legal proceedings and based on legal advice, no adjustments have
been made to the financial statements for the year ended March 31, 2012.
b. Note 29(d) of the financial statements regarding sales returns from
a company owned by a key managerial personnel of the Company more fully
described therein, having no impact on the loss for the year ended
March 31, 2012.
5. The Company has tax losses during the year ended March 31, 2012 and
has deferred tax assets of Rs.38,786,193 as at March 31, 2012 (March
31, 2011-Rs.13,101,834). The Company has recognized deferred tax assets
on the basis of future taxable income and ultimate outcome of certain
ongoing and proposed projects, which in our opinion, does not meet the
requirement of virtual certainty for recognition of deferred tax asset
as required under Accounting Standard 22 "Accounting for Taxes on
Income", notified pursuant to the Companies (Accounting Standards)
Rules, 2006 (as amended). This had caused us to qualify our audit
opinion on the financial statements relating to the preceding year. Had
such deferred tax assets not been recognized, loss for the year would
have been higher by Rs.38,786,193 (Profit for the year ended March 31,
2011 would have been lower by Rs. 13,101,834). Further, deferred tax
assets and reserves and surplus as at March 31, 2012 would have been
lower by Rs.38,786,193 (March 31, 2011-Rs.13,101,834).
6. As of March 31, 2012, the Company has investment of
Rs.2,436,388,828 (including Share application money pending allotment
of Rs.830,647,828) in subsidiary companies. Based on the audited
financial statements of the subsidiary companies as made available to us
by the Company, it is observed that the subsidiary companies have given
advances amounting to Rs. 828,236,000 to companies owned by or
significantly influenced by key managerial personnel, towards real estate
projects, which are in various stages of development/ project set-up.
Pending settlement of such advances or achievement of Profitable
operations of such real estate projects in future as the case may be,
we are unable to comment on the matter and the consequential effect, if
any, on the financial statements for the year ended March 31, 2012.
7. Further to our comments in the Annexure referred to above, we
report that:
i. Except for our comment in paragraph 6 above, we have obtained all
the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;
ii. Except for our comment in paragraph 5 above, 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;
iii. The balance sheet, statement of Profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. Except for our comment in paragraph 5 above, in our opinion, the
balance sheet, statement of Profit and loss and 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;
v. On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us except for the effect of the matter stated
in paragraph 5 above and the possible effect of the matter stated in
paragraph 6 above, the said accounts give the information required by
the Companies Act, 1956, in the manner so required and give a true and
fair view in conformity with the accounting principles generally
accepted in India;
a. in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2012;
b. in the case of the statement of Profit and loss, of the loss for the
year ended on that date; and
c. in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date Re:
Nitesh Estates Limited ('the Company')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identifed on such
verifcation.
(c) There was no disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verifcation of inventory
at reasonable intervals during the year.
(b) The procedures of physical verifcation of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verifcation.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. However, the Company has
granted interest-free advances in the nature of loans to one party
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year was
Rs.12,238,190 and the year-end balance was Rs.110,270.
(b) According to the information and explanations given to us, and
having regard to management's representation that the interest-free
advances are given to parties who are undertaking real estate
development projects in which the Company has commercial interest, the
rate of interest and other terms and conditions for such advances are
not prima facie prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, there
are no Specific covenants with regard to the repayment of such advances.
We are informed that the Company has not demanded repayment of any such
advances during the year, and thus, there has been no default on the
part of the parties to whom the advances have been granted. The
advances given are interest free.
(d) There is no overdue amount of such advances granted to parties
listed in the register maintained under section 301 of the Companies
Act, 1956.
(e) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured from companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. However, the Company has taken
interest-free advances in the nature of loans from two parties covered
in the register maintained under section 301 of the Companies Act 1956.
The maximum amount involved during the year was Rs.62,544,628 and the
year-end balance was Rs.43,269,441.
(f) In our opinion and according to the information and explanations
given to us, the terms and conditions for such interest- free advances
are not prima facie prejudicial to the interest of the Company.
(g) According to the information and explanations given to us, there
are no Specific covenants with regard to the repayment of such advances.
As informed to us, the Company has repaid the advances as demanded
during the year, and thus, there has been no default on the part of the
Company. The advances taken are interest free.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets, however, the internal control system with
respect to timely documentation for purchase of inventory and for
rendering of services require further strengthening. The activities of
the Company do not involve sale of goods. During the course of our
audit, we have not observed any major weakness or continuing failure to
correct any major weakness in the internal control system of the
Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In respect of transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs entered into
during the financial year, because of the unique and specialized nature
of the items involved and absence of any comparable prices, we are
unable to comment whether the transact ons were made at prevailing
market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(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 the Central Government for the
maintenance of cost records under section 209(1)(d) of the Act and are
of the opinion that prima facie, the prescribed accounts and records
have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues have generally been regularly deposited
with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follow:
Name of the Nature of
dues Amount
(Rs.) Period to
which the Forum where dispute is
pending
statute amount
relates
Income Tax
Act, Income tax 418,536 FY 2006-07 Commissioner of Income-
tax (Appeals)
1961 29,857,170 FY 2007-08
5,140,706 FY 2008-09
Finance
Act, Service
tax and 31,156,450 FY 2006-08 Customs, Excise and
Service Tax
1994 penalty Appellate Tribunal
(x) The Company has no accumulated losses at the end of the financial
year and it has incurred cash losses in the current financial year. In
the immediately preceding financial year, the Company had not incurred
cash loss.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or bank. The Company did not have any outstanding
debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loan taken by subsidiary from bank, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company, having regard to
management's representation that the guarantee is given to subsidiary
in the interest of the Company's business. According to the information
and explanations given to us, the Company has not given any guarantee
for loans taken by others from financial institutions.
(xvi) Based on information and explanations given to us by the
management, term loans, except for term loan of Rs.75 million taken and
utilized in the previous year and outstanding as at the balance sheet
date, were applied for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration No.101049W
Chartered Accountants
per Adarsh Ranka
Partner
Membership No.: 209567
Place : Mumbai
Date : May 25, 2012
Mar 31, 2011
1. We have audited the attached balance sheet of Nitesh Estates
Limited ('the Company') as at March 31,2011 and also the profit and
loss account and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note 21 in
Notes to Accounts regarding purchase of services amounting to
Rs.11,676,140 during the year ended March 31,2011, from private limited
companies, covered under Section 297 of the Companies Act, 1956, in
respect of which no prior approval of Central Government as required
under Section 297 of the Companies Act, 1956 was obtained. In this
regard, the Company has applied to the Company Law Board ('CLB') under
section 621A of the Companies Act, 1956 for compounding of the above
non-compliance, which is under review by the CLB. Pending such
approval, no adjustments have been made to the financial statements for
the year ended March 31,2011.
5. During the year ended March 31,2011, the Company purchased a
developed property (apartment) from a related party for a consideration
of Rs.30,462,885 (including other charges) and sold the said apartment
to another party for a consideration of Rs.60,000,000. Having regard to
the pricing of the aforesaid transactions and the terms of collection
of sale proceeds, we are unable to comment on the aforesaid
transactions and its impact, if any, on the financial statements for
the year ended March 31,2011.
6. The Company has tax losses during the year ended March 31,2011 and
has deferred tax assets of Rs. 13,101,834 as at March 31,2011. The
Company has recognized deferred tax assets on the basis of future
taxable income and ultimate outcome of certain ongoing and proposed
projects, which in our opinion, does not meet the requirement of
virtual certainty for recognition of deferred tax asset as required
under Accounting Standard 22 "Accounting for Taxes on Income", notified
pursuant to the Companies (Accounting Standards) Rules, 2006 (as
amended). Had such deferred tax assets not been recognized, profit for
the year would have been lower by Rs. 13,101,834. Further, deferred
tax assets and reserves and surplus would have been lower by Rs.
13,101,834 as at March 31,2011.
7. Further to our comments in the Annexure referred to above, we
report that:
i. Subject to our comment in paragraph 5 above, we have obtained all
the information and explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;
ii. Subject to our comment in paragraph 6 above, 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;
iii. The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. Subject to our comment in paragraph 6 above, in our opinion, the
balance sheet, profit and loss account and 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;
v. On the basis of the written representations received from the
directors, as on March 31,2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31,2011 from being appointed as a director in terms of clause (g)
of sub-section (1) of section 274of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us subject to the matter in paragraph 5, the
impact of which is not ascertainable and the consequential effect of
matter specified in paragraph 6 above, the said accounts give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India;
a. in the case of the balance sheet, of the state of affairs of the
Company as at March 31,2011;
b. in the case of the profit and Loss account, of the profit
for the year ended on that date; and
c. in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date Re:
Nitesh Estates Limited ('the Company')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(c) There was no disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. However, the Company has
granted interest-free advances in the nature of loans to three parties
(one subsidiary and two affiliates) covered in the register maintained
under section 301 of the Companies Act, 1956. The maximum amount
involved during the year was Rs.27,649,136 and the year-end balance of
interest-free advances granted to such parties was Rs.12,238,190.
(b) According to the information and explanations given to us, and
having regard to management's representation that the interest-free
advances are given to parties who are undertaking real estate
development projects in which the Company has commercial interest, the
rate of interest and other terms and conditions for such advances are
not prima facie prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, there
are no specific covenants with regard to the repayment of such
advances. We are informed that the Company has not demanded repayment
of any such advances during the year, and thus, there has been no
default on the part of the parties to whom the advances have been
granted. The advances given are interest free.
(d) There is no overdue amount of such advances granted to parties
listed in the register maintained under section 301 of the Companies
Act, 1956.
(e) The Company has taken loan from one party covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs.25,865,000 and the year-end
balance of loan taken from such party was Rs.Nil.
(f) In our opinion and according to the information and explanations
given to us, the terms and conditions for such interest-free loan were
not prima facie prejudicial to the interest of the Company.
(g) According to the information and explanations given to us, there
were no specific covenants with regard to the repayment of such
loan. The Company has repaid such loan during the year and thus, there
has been no default on the part of the Company. The loan taken was
interest free.
(h) The Company has also taken interest-free advances in the nature of
loans from two parties covered in the register maintained under section
301 of the Companies Act, 1956. The maximum amount involved during the
year was Rs.134,880,404 and the year-end balance of such interest-free
advances taken from such parties was Rs.59,875,645. In our opinion and
according to the information and explanations given to us, the terms
and conditions for such interest-free advances are not prima facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, there are no specific
covenants with regard to the repayment of such advances. As informed to
us, the parties have not demanded repayment of any such advances during
the year, and thus, there has been no default on the part of the
Company. The advances taken are interest free.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets, however, the internal control system with
respect to timely documentation for purchase of inventory and for
rendering of services require further strengthening. The activities of
the Company do not involve sale of goods. During the course of our
audit, we have not observed any major weakness or continuing failure to
correct any major weakness in the internal control system of the
Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In respect of transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs entered into
during the financial year, because of the unique and specialized nature
of the items involved and absence of any comparable prices, we are
unable to comment whether the transactions were made at prevailing
market prices at the relevanttime.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed the maintenance of cost records under
clause (d) of sub-section (1) of section 209 of the Companies Act,
1956, for the products of the Company.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Nature of Amount Period to Forum where
Name of the statute dues (Rs) which the dispute is pending
amount
relates
418,536 FY 2006-07 commissioner of
IncomeTax Act, 1961 Incometax
29,857,170 FY 2007-08 Income-tax
(Appeals)
Finance Act, 1994 Service
tax 31,156,450 FY 2006-08 Customs, Excise
and
and
penalty Service Tax
Appellate
Tribunal
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, the Company has defaulted in
repayment of dues to financial institution and bank as given below. The
Company did not have any outstanding debentures during the year.
Nature of the dues Amount (Rs.) Delays Payment Date
Principal amount due to
financial 490,190,271 1 - 125days Various dates*
institution and bank
Interest amount due to
financial 37,255,789 l - 49days Various dates*
institution and bank
* These dues are not outstanding as at the balance sheet date.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause4(xiii) of the
Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) The Company has given guarantees in respect of loans taken by
others from a bank and a financial institution in respect of which no
consideration has been charged. There are no other guarantees given by
the Company for loans taken by others from bank or financial
institutions.
(xvi) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that term loan amounting to Rs.l 50,000,000 has not been utilized
for the purpose for which the loan was obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) We have verified that the end use of money raised by public issue
is as disclosed in the notes to the financial statements.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration No.101049W
Chartered Accountants
perAdarshRanka
Partner
Membership No.: 209567
Place: Mumbai
Date: 30th May, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Nitesh Estates
Limited (formerly Nitesh Estates Private Limited) (the Company) as at
March 31, 2010 and also the Profit and Loss Account and the Cash Flow
Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the 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 of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note 21 in
Notes to Accounts, regarding the Companys investment of Rs.244,920,181
as at March 31, 2010, in the equity shares towards share capital of
Nitesh Indiranagar Retail Private Limited (NIRPL), a wholly owned
subsidiary of the Company. NIRPL has paid a non-refundable deposit of
Rs.355,000,000 to the landowner under a Memorandum of Understanding
(MOU) and has incurred other project specific expenses amounting to
Rs.242,012,142. Under the terms of the aforesaid MOU, a joint
development agreement f JDA) was to be executed by NIRPL on or before
June 30, 2010, failing which the other party is entitled to forfeit the
aforesaid non-refundable deposit and not continue with the joint
development arrangement. As further discussed in Note 21, as informed
to us, NIRPL and the other party have been and are in active
discussions to finalise the terms of the JDA and the other party has
not forfeited the aforesaid deposit. Pending final outcome in the
matter, no adjustments have been made in this regard to the financial
statements as at March 31, 2010.
5. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, profit and loss account and
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;
v. On the basis of the written representations received from the
directors, as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a. in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2010;
b. in the case of the profit and loss account, of the profit for the
year ended on that date; and
c. in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: Nitesh Estates Limited (formerly Nitesh Estates Private Limited)
(the Company)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) As informed, the Company has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
However, the Company has granted interest-free advances in nature of
loans to three parties covered in the register maintained under section
301 of the Companies Act, 1956. The maximum amount involved during the
year was Rs.45,246,499 and the year-end balance receivable from such
parties is Rs.27,146,499. The advances have been granted for various
real estate development projects being undertaken by such entities, in
which the Company has interest. Accordingly, the terms and conditions
of such advances are not prima facie prejudicial to the interest of the
Company. According to the information and explanations given to us,
there are no specific covenants with regard to the repayment of such
advances and the Company has not demanded repayment of such advances
during the year. Thus, there has been no default on the part of the
parties to whom the advances have been made.
(b) As informed, the Company has taken loan from one party covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs.27,515,000 and the
year-end balance payable is Rs.25,865,000. According to the information
and explanations given to us, the loan taken is interest-free.
Accordingly, the terms and conditions of such advances are not prima
facie prejudicial to the interest of the Company. Further, there are no
specific covenants with regard to the repayment of such loan and the
party has not demanded repayment of such loan during the year. Thus,
there has been no default on the part of the Company.
The Company has also taken interest-free advances in nature of loans
from three parties covered in the register maintained under section 301
of the Companies Act, 1956. The maximum amount involved during the year
was Rs.299,815,885 and the year-end balance payable to such parties is
Rs. 134,880,404. The advances have been taken for various real estate
development projects being undertaken by the Company, in which such
parties have interest. Accordingly, the terms and conditions of such
advances are not prima facie prejudicial to the interest of the
Company. According to the information and explanations given to us,
there are no specific covenants with regard to the repayment of such
advances and the parties have not demanded repayment of such advances
during the year. Thus, there has been no default on the part of the
Company.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of services.
During the course of our audit, no major weakness has been noticed in
the internal control system in respect of these areas. During the
course of our audit, we have not observed any continuing failure to
correct major weakness in internal control system of the Company. The
clause relating to sale of goods is not applicable to the Company.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered. (b) In respect of transactions made in pursuance of
such contracts or arrangements exceeding value of Rupees five lakhs
entered into during the financial year, based on information and
explanations provided to us by management, and having regard to the
unique and specialized nature of the items involved and absence of any
comparable prices, we are unable to comment on whether the transactions
were made at prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed maintenance of cost records under clause
(d) of sub-section (1) of section 209 of the Companies Act, 1956 for
the products of the Company.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, sales-tax,
wealth-tax, customs duty, excise duty, cess have generally been
regularly deposited with the appropriate authorities though there has
been significant delay in deposit of service tax and withholding tax
during April 2009 to September 2009. Further, since the Central
Government has till date not prescribed the amount of cess payable
under section 441A of the Companies Act, 1956, we are not in a position
to comment upon the regularity or otherwise of the company in
depositing the same. (b) According to the information and explanations
given to us, undisputed dues in respect of provident fund, investor
education and protection fund, employees state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other statutory dues which were outstanding, at the yearend for a
period of more than six months from the date they became payable are as
follows.
Name of the
statute Nature of the Amount Period to
which Due date Date
of
dues Rupees the amount
relates payment
Income Tax Interest on 3,204,743 May 2008 to Various August
11,2010
Act,1961 Withholding
Taxes August
2009 dates
(c) According to the information and explanation given to us, there are
no dues of income tax, sales-tax, wealth tax, service tax, customs
duty, excise duty and cess which have not been deposited on account of
any dispute, except as follows:
Name of
the statute Nature of Amount Period to which Forum where
dues (Rupees) the amount
relates dispute is
pending
Income Tax
Act, 1961 Income tax 418,536 FY 2006-07 Commissioner of
Income-tax
(Appeals)
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution and bank, except as given below. The Company did not have
any outstanding debentures during the year.
Nature of the dues Amount
(Rupees) Delays Payment Date
Principal amount
due to bank 23,500,000 47 days May 17,2010
Interest amount due
to financial
institution and bank 83,539,455 1-91 days Various dates*
2,244,314 3 days April 3,2010
650,910 26 days April 26,2010
326,271 29 days April 29,2010
112,530 39 days April 8,2010
12,442,621 49 days May 19,2010
1,420,255 59 days April 28,2010
96,100 60 days April 1,2010
130,697 64 days April 5,2010
348,299 67 days April 8,2010
1,012,005 80 days May 19,2010
1,481,832 87 days April 28,2010
703,981 88 days April29,2010
759,490 89 days April 30, 2010
* These dues are not outstanding as at the balance sheet date.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) The Company has given guarantees in respect of loans taken by
others from bank and financial institution in respect of which no
consideration has been charged. There are no other guarantees given by
the Company for loans taken by others from bank or financial
institutions.
(xvi) Based on information and explanations given to us by the
management, term loans, except for term loan of Rs.500 million taken
and utilized in the previous year and outstanding as at the balance
sheet date, were applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has made preferential allotment of shares to a
company covered in the register maintained under section 301 of the
Companies Act, 1956. In our opinion the price at which shares have been
issued is not prejudicial to the interest of the Company.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations and specific representations given to
us by the management, we report that no fraud on or by the Company has
been noticed or reported during the course of our audit.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration No.101049W
Chartered Accountants
per Aditya Vikram Bhauwala
Place: Bangalore Partner
Date: August 11, 2010 Membership No.: 208382