Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of PRAJAY ENGINEERS SYNDICATE LIMITED (âthe Companyâ) which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including other comprehensive income), Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), Loss(financial performance including other comprehensive income), cash flows of the Company and the changes in equity of company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards(lnd AS) 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 judgements 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, which have been used for the purpose of preparation of the standalone Ind AS financial statements by the Board of Directors of the company.
Auditorâs 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 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 auditorâs judgement, 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 Companyâs 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 Companyâs 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 affairs(Financial Position) of the Company as at March 31, 2018, and its Loss(Financial Performance including other comprehensive income) and its Cash Flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following:
a) Note 39(a) of the Standalone Financial Statements, in respect of trade receivable considered good include an amount of Rs.21059.50 Lakhs due from customers which are outstanding for more than six months. We are unable to comment on the realisation of these receivables in the absence of conformation from the concerned parties. An amount of Rs.1246.96 Lakhs is set aside towards provision for trade receivables considered as doubtful.
b) Note 39(b) of the standalone financial statements, in respect of Loans & Advances amounting to Rs.5621.56 Lakhs towards purchase of Land/Development towards certain project of long term nature, and an amount of Rs.2018.77 Lakhs given to suppliers, etc outstanding from earlier years. We are unable to comment on the realisation of these advances. An amount of Rs.700 Lakhs is set aside towards provision for Advances considered as doubtful.
Our Opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ 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 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 and the Statement Cash Flow, 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 Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 âAnnexure Bâ.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Ind AS financial statements - Refer Note 34(c) to the Standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The disclosure regarding details of specified bank notes held and transacted during 8th November, 2016 to 30th December, 2016 has not been made since the requirement does not pertain to financial year ended 31st March, 2018.
âAnnexure Aâ to the Independent Auditorsâ Report
Referred to in paragraph 1 under the heading âReport on Other Legal & Regulatory Requirementâ of our report of even date to the Standalone Ind AS financial statements of the Company for the year ended March 31, 2018:
Statement on matters specified in paragraphs 3&4of the Companies (Auditorâs Report) Order, 2016:
1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) As explained to us, The Company has a programme for physical verification of fixed assets at periodic intervals in our opinion, the period of verification is reasonable having regard to the size of the company and nature of its Assets. No material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the company.
2) The Inventory includes construction work in progress and cost of development rights in Identified land. Physical verification of inventory has been conducted in reasonable Interval by the management. No material discrepancies noticed on such verification.
3) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (C) of the Order are not applicable to the Company and hence not commented upon.
4) 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 Companies Act, 2013 In respect of loans, investments, guarantees, and security.
5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
6) As informed to us, the maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the company.
7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been 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 with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2018 for a period of more than six months from the date on when they become payable.
b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute, Except as given below
Particulars |
Amount (Rs. Lakhs) |
Period To Which The Amount Relates(FY) |
Forum Where the Dispute Is Pending |
Income Tax |
873.55 |
2007-08 |
ITAT |
Income Tax |
75.64 |
2010-11 |
ITAT |
Service Tax |
1820.62 |
2006-07 To 2010-11 |
CESTAT |
8) In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of dues to banks. Principal amounts aggregating Rs.9090.28 Lakhs are due from December 2012 To March 2018, Interest amounts aggregating Rs.14326.32 Lakhs are due from April 2013 to March 2018. The Company has not taken loan either form financial institutions or from the government and has not issued any debentures.
9) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.
10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanations given by the management, during the year the managerial remuneration is not paid or provided. Hence specific approvals from Central Government with reference to section 197 read with Schedule V to the Companies Act does not arise.
12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii)of the Order are not applicable to the Company.
13) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanations given by the management, 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 provisions of clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.
15) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
16) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.
âAnnexure Bâ to the Independent Auditors Report of even dated on the standalone Ind AS Financial Statements PRAJAY ENGINEERS SYNDICATE LIMITED.
Report on Internal Financial Controls under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013(âthe Actâ)
We have audited the internal financial controls over financial reporting of PRAJAY ENGINEERS SYNDICATE LIMITED (âThe Companyâ) as of March 31,2018 in conjunction with our audit of the standalone Ind AS financial statements of the company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by Institute of Chartered Accountants of Indiaâ. These Responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act,2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) 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 auditorâs judgement, including the assessment of the risks of material misstatement of the standalone Ind AS 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs 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 Standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
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, the company has, in all material respect, an adequate internal financial control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at march 31,2018,based on â 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
Karumanchi & Associates
Chartered Accountants
Firmâs registration number:001753S
K.Peddabbai
Partner
M.No: 025036
Place: Hyderabad
Date : 30.05.2018
Mar 31, 2016
Independent Auditorâs Report To the Members of
M/s. Prajay Engineers Syndicate Limited Report on the Financial Statements
We have audited the accompanying Standalone financial statements of M/s.Prajay Engineers Syndicate Limited (âthe Companyâ) which comprises the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs 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 auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 March 31, 2016, and its Loss and its Cash Flow for the year ended on that date.
Emphasis of matter
We draw attention to the following:
a) Note 37(a) of the Standalone Financial Statements, in respect of trade receivables considered good include an amount of Rs, 21498.92 Lakhs due from customers which are outstanding for more than six months. We are unable to comment on the realization of these receivables in the absence of confirmation from the concerned parties. An amount of Rs, 1246.96 Lakhs is set aside towards provision for trade receivables considered as doubtful.
b) Note 37(b) of the Standalone Financial Statements, in respect of Loans and advances amounting to Rs, 5355.14 Lakhs towards purchase of land/ development towards certain projects of long term nature, and an amount of Rs, 1387.86 Lakhs given to suppliers etc. outstanding from earlier years. We are unable to comment on the realization of these advances. An amount of Rs, 700 Lakhs is set aside towards provision for advances considered as doubtful.
c) Note 24 and 25 (c) In respect of recognizing profit on construction project under an agreement to sell, stage of completion is determined as a proportion that contract costs incurred for the work performed bear to the estimated total costs. Similarly contract revenue is recognized under the percentage of completion method measured by survey of work performed. Further, expected loss on contracts is recognized when it is probable that the total contract costs will exceed the total contract revenue. This practice is being consistently followed by the Company. For this purpose, total project/contract costs incurred, and cost to completion of projects/ contracts which is arrived at by the management based on current technical data, forecast and estimate of net expenditure to be incurred in future including for contingencies, etc, which being technical matters have been relied upon by us.
Further, with effect from 01.04.2012, ICAI has issued Guidance Note on Accounting for real estate Transactions (revised 2012), where âProject costs incurredâ method is the preferred method for computation of revenue. This is not being followed.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 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 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 and the Cash Flow Statement dealt with by this Report are in agreement with the books of account
d. In our opinion, the aforesaid (Standalone) financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of 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 Bâ.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position- refer Note 30 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
Referred to in paragraph 1 under the heading âReport on Other Legal & Regulatory Requirementâ of our report of even date to the standalone financial statements of the Company for the year ended March 31, 2016:
1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed.
(c) The title deeds of immovable properties are held in the name of the company.
2) (a) The management has conducted the physical verification of inventory at reasonable intervals.
(b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.
3) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (C) of the Order are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.
5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
6) As informed to us, the maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the company.
7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been 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 with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.
(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute, except as given below.
Statement of disputed dues:
Particulars |
Amount (Rs, Lakhs) |
Period to which the amount relates (FY) |
Forum where the dispute is pending |
Income tax |
15.45 |
2006-07 |
Income Tax Appellate Tribunal |
289.20 |
2009-10 |
Income Tax Appellate Tribunal |
|
841.49 |
2010-11 |
Income Tax Appellate Tribunal |
|
103.75 |
2011-12 |
Commissioner of Income Tax (Appeals) |
|
Service tax |
1820.62 |
2006-07 to 2010-11 |
Customs, Excise and Service Tax Appellate Tribunal |
8) In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of dues to banks. Principal amounts aggregating Rs, 5816.53 Lakhs are due from December 2012 to March 2016, and interest amounts aggregating Rs, 7328.36 Lakhs are due from April 2013 to March 2016. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.
9) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.
10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.
13) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanations given by the management, 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 provisions of clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.
15) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
16) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.
"Annexure B" to the Independent AuditorRs,s Report of even date on the Standalone Financial Statements of M/s Prajay Engineers Syndicate Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
In conjunction with our audit of the standalone financial statements of the company as of and for the year ended 31st March 2016, we have audited the internal financial controls over financial reporting of M/s.Prajay Engineers Syndicate Limited (âthe Companyâ) for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) 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 auditorâs judgement, 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs 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 companyâs 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, 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 March 31, 2016, based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ.
For and on behalf of
Meenavalli & Associates
CA. Machar Rao. M
Chartered Accountants
Partner
FRN:012208S
M.No:218836
Place : Hyderabad
Date : 14.06.2016
Mar 31, 2015
I have audited the accompanying standalone financial statements of
Prajay Engineers Syndicate Limited ("the Company"), which comprise the
Balance Sheet as at March 31,2015 and the Statement of Profit and Loss
and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's responsibility for the Standalone 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 financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
My responsibility is to express an opinion on these standalone
financial statements based on my audit. I 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.
I conducted my audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that I comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the 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 the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and
appropriate to provide a basis for my audit opinion on the standalone
financial statements.
Opinion
In my opinion and to the best of my information and according to the
explanations given to me, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31,2015, and its loss and its cash flows for the year ended on
that date.
Emphasis of matter
I draw attention to the following:
a) Note 37(a) of the Standalone Financial Statements, in respect of
trade receivables considered good include an amount of Rs. 23,519.03
lacs due from customers which are outstanding for more than six
months. For the reasons stated therein, I am unable to comment on the
realization of the aforesaid receivables.
b) Note 37(b) of the Standalone Financial Statements, in respect of
advances amounting to Rs. 5,999.05 lacs given to landlords /developers,
and Rs. 727.58 lacs given to suppliers, etc outstanding from earlier
years in respect of which no provision has been made for the reasons
stated therein.
c) Note 24 and 25, in respect of recognizing profit on construction
project under an agreement to sell, stage of completion is determined
as a proportion that contract costs incurred for the work performed
bear to the estimated total costs. Similarly contract revenue is
recognized under the percentage of completion method measured by survey
of work performed. Further, expected loss on contracts is recognized
when it is probable that the total contract costs will exceed the total
contract revenue. This practice is being consistently followed by the
Company. For this purpose, total project/contract costs incurred, and
cost to completion of projects/contracts which is arrived at by the
management based on current technical data, forecast and estimate of
net expenditure to be incurred in future including for contingencies,
etc, which being technical matters have been relied upon by me.
My opinion is not modified in respect of these matters.
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 in terms of section 143(11)
of the Act, I give in the Annexure a statement on the matters specified
in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, I report that:
a) I have sought and obtained all the information and explanations
which to the best of my knowledge and belief were necessary for the
purpose of my audit;
b) In my opinion proper books of account as required by law have been
kept by the Company so far as appears from my examination of those
books.
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In my 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 March 31,2015 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2015 from being
appointed as a director in terms of section 164 (2) of the Act.
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 my opinion and to the best of my information and
according to the explanations given to me:
i) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - refer Note 30 to the
financial statements.
ii) The Company did not have any material foreseeable losses relating
to long term contracts including derivative contracts.
iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund, by the
Company.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under "Report on other legal and regulatory
requirements" section of my Report of even date to the members of
Prajay Engineers Syndicate Limited)
(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) As explained to me, all the fixed assets are physically verified by
the Management in a phased periodical manner, which in my opinion is
reasonable, having regard to the size of the Company and the nature of
its assets. According to the information and explanations given to me,
no material discrepancies were noticed on such verification.
(ii) (a) The inventories in respect of hotels and resorts have been
physically verified by the management, at the year end. In my opinion
the frequency of verification is reasonable.
(b) In my opinion and according to the information and explanations
given to me, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(c) On the basis of my examination of the records of inventory, in my
opinion, the Company is maintaining proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and book records were not material in relation to the operations
of the Company.
(iii) According to the information and explanations given to me, the
Company has not granted any loan secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
189 of the Companies Act, 2013 and accordingly clauses iii (a) and iii
(b) of paragraph 3 of CARO are not applicable.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. During the course of my audit, I have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) The company has not accepted deposits from the public during the
year. The deposits outstanding have been repaid fully during the year
and there are no outstanding deposits as at March 31,2015, and the
Company in this respect has complied with the provisions of sections 73
to 76 or any other relevant provisions of the Companies Act, 2013 and
the rules framed there under.
(vi) I am informed that the Central Government has not prescribed
maintenance of cost records under Section 148(1) of the Companies Act,
2013.
(vii) (a) According to records of the Company, the Company is generally
regular in depositing undisputed statutory dues, including provident
fund, employees' state insurance, income-tax, sales-tax, wealth tax,
service tax, customs duty, excise duty, value added tax, cess and any
other material statutory dues applicable to it. There are no arrears of
the aforesaid dues as at 31st March, 2015 outstanding for a period of
more than six months from the date they became payable. There are no
dues towards investor education and protection fund.
(b) As at 31st March, 2015 according to the records of the Company and
the information and explanations given to me, there are no dues of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, and cess matters that have not been deposited on account of any
dispute, except as given below.
Particulars Amount Period to which the
(Rs.lacs) amount relates(FY)
15.45 2006-07
289.20 2009-10
Income tax 841.49 2010-11
103.75 2011-12
Service tax 1820.62 2006-07 to
2010-11
Value added tax 2.77 2010-11
3.00 2011-12
Particulars Forum where the dispute is
pending
Income Tax Appellate Tribunal
Income Tax Appellate Tribunal
Income tax Income Tax Appellate Tribunal
Commissioner of Income Tax
(Appeals)
Service tax Customs, Excise and Service Tax
Appellate Tribunal
Value added tax Appellate Deputy Commissioner
Appellate Deputy Commissioner
(viii) The Company does not have accumulated losses as at 31st March,
2015. However, the Company has incurred cash loss during the financial
year ended on 31st March, 2015; there was no cash loss in the
immediately preceding financial year.
(ix) In my opinion and according to the information and explanations
given to me, the company has defaulted in repayment of dues to banks.
Principal amounts aggregating Rs. 3,966.55 lacs are due from December
2012 to March 2015, and interest amounts aggregating Rs. 4,408.15 lacs
are due from April 2013 to March 2015. There are no debentures as on
the balance sheet date.
(x) According to the information and explanations given to me, the
company has given guarantee, for loans taken by Prajay Properties
Private Limited from banks or financial institutions, the terms and
conditions whereof are not prima facie prejudicial to the interest of
the company.
(xi) In my opinion and according to the information and explanations
given to me, the term loans were applied for the purposes for which
they were obtained.
(xii) To the best of my knowledge and belief and according to the
information and explanations given to me, no fraud on or by the Company
was noticed or reported during the year.
S V RANGAN
Place : Secunderabad Chartered Accountant
Date : May 30, 2015 Membership No. 022037
Mar 31, 2014
I have audited the accompanying financial statements of Prajay
Engineers Syndicate Limited ("the Company"), which comprise the Balance
Sheet as at March 31,2014 and the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards notified under the Companies Act, 1956 ("the
Act") (which continue to be applicable in respect of Section 133 of the
Companies Act, 2013 in terms of General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs) and in accordance
with the accounting principles generally accepted in India. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatements, whether due to fraud or error.
Auditor''s responsibility
My responsibility is to express an opinion on these financial
statements based on my audit. I conducted my audit in accordance with
the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that I comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and
appropriate to provide a basis for my audit opinion.
Opinion
In my opinion and to the best of my information and according to the
explanations given to me, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Emphasis of matter
I draw attention to the following:
a) Note 37(a) of the Financial Statements, in respect of trade
receivables considered good include an amount of Rs. 24,419.62 lacs due
from customers which are outstanding for more than six months. For the
reasons stated therein, I am unable to comment on the realization of
the aforesaid receivables.
b) Note 37(b) of the Financial Statements, in respect of advances
amounting to Rs. 6,191.04 lacs given to landlords/developers, and Rs.
188.94 lacs given to suppliers, etc outstanding from earlier years in
respect of which no provision has been made for the reasons stated
therein.
c) Note 24 and 25, in respect of recognizing profit on construction
project under an agreement to sell, stage of completion is determined
as a proportion that contract costs incurred for the work performed
bear to the estimated total costs. Similarly contract revenue is
recognized under the percentage of completion method measured by survey
of work performed. Further, expected loss on contracts is recognized
when it is probable that the total contract costs will exceed the total
contract revenue. This practice is being consistently followed by the
Company. For this purpose, total project/contract costs incurred, and
cost to completion of projects/contracts which is arrived at by the
management based on current technical data, forecast and estimate of
net expenditure to be incurred in future including for contingencies,
etc, which being technical matters have been relied upon by me.
My opinion is not qualified in respect of these matters.
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 in terms of section 227 (4A)
of the Act, I 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, I report that:
a) I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purpose of my
audit;
b) In my opinion proper books of account as required by law have been
kept by the Company so far as appears from my examination of those
books.
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In my opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards notified under
the Act (which continue to be applicable in respect of Section 133 of
the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs).
e) On the basis of written representations received from the directors
as on March 31,2014 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2014 from being
appointed as a director in terms of section 274 (1)(g) of the Act.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 1 under the heading "Report on other legal
and regulatory requirements" of the Auditors'' Report of even date to
the members of Prajay Engineers Syndicate Limited)
The nature of the Company''s business/activities during the year is such
that clauses (xii), (xiii), (xiv), (xix) of paragraph 4 of the
Companies (Auditor''s Report) Order, 2003 (CARO) are not applicable to
the Company.
(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) As explained to me, all the fixed assets are physically verified by
the management in a phased periodical manner, which in my opinion is
reasonable, having regard to the size of the Company and the nature of
its assets. According to the information and explanations given to me,
no material discrepancies were noticed on such verification.
(c) The fixed assets disposed off during the year, in my opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in my opinion, not affected the going concern
status of the Company.
(ii) (a) The inventories in respect of hotels and resorts have been
physically verified by the management, at the year end. In my opinion
the frequency of verification is reasonable.
(b) In my opinion and according to the information and explanations
given to me, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(c) On the basis of my examination of the records of inventory, in my
opinion, the Company is maintaining proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and book records were not material in relation to the operations
of the Company.
(iii) (a) According to the information and explanations given to me,
the Company has not granted any loan secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956 and accordingly clauses iii (b) to iii
(d) of paragraph 4 of CARO are not applicable.
(b) According to the information and explanations given to me, the
Company has taken secured/ unsecured loan from two parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount of loan outstanding during the year was Rs. 3,277.50
lacs and the balance as at the year end is Rs. 3,276.08 lacs.
(c) In my opinion and according to the information and explanations
given to me, the terms and conditions of such loans are not, prima
facie, prejudicial to the interest of the Company. There is no interest
payable on the loans.
(d) In respect of the loans taken, the principal amounts have not
fallen due for payment.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. During the course of my audit, I have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) In my opinion, and according to the information and
explanations given to me, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that Section.
(b) In my opinion and according to the information and explanations
given to me, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lacs in respect of
any party during the year have been made at prices, which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The company has accepted deposits from the public during the year
and has complied with the provisions of sections 58A, 58AA and the
rules framed there under.
(vii) The Company has an internal audit system, but it is not
commensurate with the size and nature of the business of the Company.
(viii) I am informed that the Central Government has not prescribed
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956.
(ix) (a) According to records of the Company, the Company is generally
regular in depositing undisputed statutory dues, including provident
fund, employees'' state insurance, income-tax, sales-tax, wealth tax,
service tax, customs duty, excise duty, cess and any other material
statutory dues applicable to it. There are no arrears of the aforesaid
dues as at 31st March, 2014 outstanding for a period of more than six
months from the date they became payable.
There are no dues towards investor education and protection fund.
(b) As at 31st March, 2014 according to the records of the Company and
the information and explanations given to me, there are no dues of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, and cess matters that have not been deposited on account of any
dispute, except as given below.
Statement of disputed dues
Particulars Amount Period to Forum where the
(Rs. lacs) which the dispute is pending
amount
relates
Income tax 15.45 2006-07 Income Tax Appellate Tribunal
289.20 2009-10 Income Tax Appellate Tribunal
Service tax 1820.62 2006-07 to Customs, Excise and Service
2010-11 Tax Appellate Tribunal
Value added tax 2.77 2010-11 Appellate Deputy Commissioner
3.00 2011-12 Appellate Deputy Commissioner
(x) The Company does not have accumulated losses as at 31st March,
2014. The Company has not incurred cash losses during the financial
year ended on that date, and in the immediately preceding financial
year.
(xi) In my opinion and according to the information and explanations
given to me, the company has defaulted in repayment of dues to banks.
Principal amounts aggregating Rs. 2007.00 lacs are due from December
2012 to March 2014, and interest amounts aggregating ''2088.86 lacs are
due from April 2013 to March 2014. There are no debentures as on the
balance sheet date.
(xii) According to the information and explanations given to me, the
company has given guarantee, for loans taken by Prajay Properties
Private Limited from banks or financial institutions, the terms and
conditions whereof are not prima facie prejudicial to the interest of
the company.
(xiii) In my opinion and according to the information and explanations
given to me, the term loans were applied for the purposes for which
they were obtained.
(xiv) According to the information and explanations given to me, and on
an overall examination of the balance sheet of the Company, there are
no funds raised on short term basis which have been used for long term
investment.
(xv) During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the Register
maintained under Section 301 of the Act.
(xvi) The Company has not raised any money through a public issue
during the year.
(xvii) To the best of my knowledge and belief and according to the
information and explanations given to me, no fraud on or by the Company
was noticed or reported during the year.
S.V. RANGAN
Place: Secunderabad Chartered Accountant
Date : May 30, 2014 Membership No. 022037
Mar 31, 2013
Report on the Financial Statements
I have audited the accompanying fi nancial statements of Prajay
Engineers Syndicate Limited ("the Company"), which comprise the Balance
Sheet as at March 31,2013, and the Statement of Profi t and Loss and
Cash Flow Statement for the year then ended, and a summary of signifi
cant accounting policies and other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for the preparation of these fi nancial
statements that give a true and fair view of the fi nancial position,
fi nancial performance and cash fl ows of the Company in accordance
with the Accounting Standards referred to in section 211 (3C) of the
Companies Act, 1956 ("the Act") and in accordance with the accounting
principles generally accepted in India. This responsibility includes
the design, implementation and maintenanceof internal control relevant
to the preparation and presentation of the fi nancial statements that
give a true and fair view and are free from material misstatements,
whether due to fraud or error.
Auditor''s responsibility
My responsibility is to express an opinion on these fi nancial
statements based on my audit. I conducted my audit in accordance with
the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that I comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the fi nancial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fi nancial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the fi nancial
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 fi nancial
statements inorder to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Company''s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the fi nancial
statements.
I believe that the audit evidence I have obtained is suffi cient and
appropriate to provide a basis for my audit opinion.
Opinion
In my opinion and to the best of my information and according to the
explanations given to me, the fi nancial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) in the case of the Statement of Profi t and Loss, of the profi t of
the Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash fl ows of the
Company for the year ended on that date.
Emphasis of matter
I draw attention to the following:
a) Note 37(a) of the Financial Statements, in respect of trade
receivables considered good include an amount of Rs.27,195.98 lacs due
from customers which are outstanding for more than six months. For the
reasons stated therein, I am unable to comment on the realization of
the aforesaid receivables.
b) Note 37(b) of the Financial Statements, in respect of advances
amounting to Rs.7,833.42 lacs given to landlords / developers, and
Rs.275.58 lacs given to suppliers, etc outstanding from earlier years in
respect of which no provision has been made for the reasons stated
therein.
c) Note 24 & 25, in respect of recognizing profi t on construction
project under an agreement to sell, stage of completion is determined
as a proportion that contract costs incurred for the work performed
bear to the estimated total costs. Similarly contract revenue is
recognized under the percentage of completion method measured by survey
of work performed. Further, expected loss on contracts is recognized
when it is probable that the total contract costs will exceed the total
contract revenue. This practice is being consistently followed by the
Company. For this purpose, total project/contract costs incurred, and
cost to completion of projects / contracts which is arrived at by the
management based on current technical data, forecast and estimate of
net expenditure to be incurred in future including for contingencies,
etc, which being technical matters have been relied upon by me.
My opinion is not qualifi ed in respect of these matters.
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 in terms of section 227 (4A)
of the Act, I give in the Annexure a statement on the matters specifi
ed in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, I report that:
a) I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purpose of my
audit;
b) in my opinion proper books of account as required by law have been
kept by the Company so far as appears from my examination of those
books.
c) the Balance Sheet, Statement of Profi t and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) in my opinion, the Balance Sheet, Statement of Profi t and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
section 211 (3C) of the Act;
e) on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualifi ed as on March 31, 2013, from being
appointed as a director in terms of section 274 (1)(g) of the Act.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 1 under the heading "Report on other legal
and regulatory requirements" of the Auditors'' Report of even date to
the members of Prajay Engineers Syndicate Limited)
The nature of the Company''s business/ activities during the year is
such that clauses (xii), (xiii), (xiv), (xix) of paragraph 4 of the
Companies (Auditor''s Report) Order, 2003 (CARO) are not applicable to
the Company.
(i) In respect of its fi xed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fi xed assets.
(b) As explained to me, all the fi xed assets are physically verifi ed
by the management in a phased periodical manner, which in my opinion is
reasonable, having regard to the size of the Company and the nature of
its assets. According to the information and explanations given to me,
no material discrepancies were noticed on such verifi cation.
(c) The fi xed assets disposed off during the year, in my opinion, do
not constitute a substantial part of the fi xed assets of the Company
and such disposal has, in my opinion, not affected the going concern
status of the Company.
(ii) (a) The inventories in respect of hotels and resorts have been
physically verifi ed by the management, at the year end. In my opinion
the frequency of verifi cation is reasonable.
(b) In my opinion and according to the information and explanations
given to me, the procedures of physical verifi cation of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(c) On the basis of my examination of the records of inventory, in my
opinion, the Company is maintaining proper records of inventory and the
discrepancies noticed on physical verifi cation between the physical
stocks and book records were not material in relation to the operations
of the Company.
(iii) (a) According to the information and explanations given to me,
the Company has not granted any loan secured or unsecured to companies,
fi rms or other parties covered in the register maintained under
Section 301 of the Companies Act, 1956 and accordingly clauses iii (b)
to iii (d) of paragraph 4 of CARO are not applicable.
(b) According to the information and explanations given to me, the
Company has taken secured/unsecured loan from two parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount of loan outstanding during the year was Rs.3,277.50
lacs and the balance as at the year end is Rs. 3,277.50 lacs.
(c) In my opinion and according to the information and explanations
given to me, the terms and conditions of such loans are not, prima
facie, prejudicial to the interest of the Company. There is no interest
payable on the loans.
(d) In respect of the loans taken, the principal amounts have not
fallen due for payment.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fi xed assets and for the sale of goods and
services. During the course of my audit, I have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) In my opinion, and according to the information and
explanations given to me, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that Section.
(b) In my opinion and according to the information and explanations
given to me, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees fi ve lacs in respect of
any party during the year have been made at prices, which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The company has accepted deposits from the public during the year
and has complied with the provisions of sections 58A, 58AA and the
rules framed there under.
(vii) The Company has an internal audit system, but it is not
commensurate with the size and nature of the business of the Company.
(viii) I am informed that the Central Government has not prescribed
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956.
(ix) According to records of the Company, the Company is generally
regular in depositing undisputed statutory dues, including provident
fund, employees'' state insurance, income-tax, sales-tax, wealth tax,
service tax, customs duty, excise duty, cess and any other material
statutory dues applicable to it. There are no arrears of the aforesaid
dues as at 31st March, 2013 outstanding for a period of more than six
months from the date they became payable. There are no dues towards
investor education and protection fund.
(x) The Company does not have accumulated losses as at 31st March,
2013. The Company has not incurred cash losses during the fi nancial
year ended on that date, but has incurred cash losses during the
immediately preceding fi nancial year.
(xi) In my opinion and according to the information and explanations
given to me, the company, during the year, has not defaulted in
repayment of dues to fi nancial institutions and banks. There are no
debentures as on the balance sheet date.
(xii) According to the information and explanations given to me, the
company has given guarantee, for loans taken by Prajay Properties
Private Limited from banks or fi nancial institutions, the terms and
conditions whereof are not prima facie prejudicial to the interest of
the company.
(xiii) In my opinion and according to the information and explanations
given to me, the term loans were applied for the purposes for which
they were obtained.
(xiv) According to the information and explanations given to me, and on
an overall examination of the balance sheet of the Company, there are
no funds raised on short term basis which have been used for long term
investment.
(xv) During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the Register
maintained under Section 301 of the Act.
(xvi) The Company has not raised any money through a public issue
during the year.
(xvii) To the best of my knowledge and belief and according to the
information and explanations given to me, no fraud on or by the Company
was noticed or reported during the year.
S V Rangan
Place : Secunderabad Chartered Accountant
Date : May 30, 2013 Membership No.022037
Mar 31, 2012
1. I have audited the attached Balance Sheet of Prajay Engineers
Syndicate Limited ("the Company") as at March 31, 2012, the Statement
of Profit and Loss and the Cash Flow Statement of the Company for the
year ended on that date, annexed thereto. These financial statements
are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my
audit.
2. I conducted my audit in accordance with auditing standards
generally accepted in India. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for
my opinion.
3. As required by the Companies (Auditor's Report) Order, 2003
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, I enclose in the annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Attention is drawn to the following:
a. Note 39(a) of the Financial Statements, in respect of Trade
Receivables, unsecured considered good outstanding for a period of more
than six months amounting to Rs.27,213.09 lacs. For the reasons stated
therein, I am unable to comment on the realizations of the aforesaid
Receivables.
b. Note 39(b) of the Financial Statements, in respect of sale of
constructed properties amounting to Rs.235.68 lacs. For the reasons
stated therein, I am unable to comment on these sales.
c. Note 39(c) ofthe Financial Statements, in respect ofadvances
amounting to Rs.7,858.42 lacs given to landlords/developers, and
Rs.1,205.17Lacs given to suppliers, etc outstanding from earlier years
in respect of which no provision has been made for the reasons stated
therein.
5. Subject to paragraph 4(a) and 4(b), and further to my comments in
the annexure referred to in paragraph (3) above, I report that:
a) I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purposes of my
audit;
b) in my opinion, proper books of account as required by law have been
kept by the company so far as it appears from my 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 my opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report are in compliance
with the accounting standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956;
e) for recognizing profit on construction project under an agreement to
sell, stage of completion is determined as a proportion that contract
costs incurred for the work performed bear to the estimated total
costs. Similarly contract revenue is recognized under the percentage of
completion method measured by survey of work performed. Further,
expected loss on contracts is recognized when it is probable that the
total contract costs will exceed the total contract revenue. This
practice is being consistently followed by the Company. For this
purpose, total project/contract costs incurred, and cost to completion
of projects/contracts which is arrived at by the management based on
current technical data, forecast and estimate of net expenditure to be
incurred in future including for contingencies, etc, which being
technical matters have been relied upon by me.
f) in my opinion and to the best of my information and according to the
explanations given to me, 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of the Statement of Profit and Loss, of the loss of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
6. On the basis of written representations received from the directors
as on March 31, 2012, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2012 from being
appointed as a director in terms of Section 274(1)(g) of the Companies
Act, 1956.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of the Auditors' Report of even date to
the members of Prajay Engineers Syndicate
Limited)
The nature of the Company's business/ activities during the year is
such that clauses (xii), (xiii), (xiv), (xix) of
paragraph 4 of the Companies (Auditor's Report) Order, 2003 (CARO)
are not applicable to the Company.
(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) As explained to me, all the fixed assets are physically verified by
the management in a phased periodical manner, which in my opinion is
reasonable, having regard to the size of the Company and the nature of
its assets. According to the information and explanations given to me,
no material discrepancies were noticed on such verification.
(c) The fixed assets disposed off during the year, in my opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in my opinion, not affected the going concern
status of the Company.
(ii) (a) The inventories in respect of hotels and resorts have been
physically verified by the management at
the year end. In my opinion the frequency of verification is
reasonable.
(b) In my opinion and according to the information and explanations
given to me, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(c) On the basis of my examination of the records of inventory, in my
opinion, the Company is maintaining proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and book records were not material in relation to the operations
of the Company.
(iii) (a) According to the information and explanations given to me,
the Company has not granted any loan
secured or unsecured to companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956
and accordingly clauses iii (b) to iii (d) of paragraph 4 of CARO are
not applicable.
(b) According to the information and explanations given to me, the
Company has taken secured/unsecured loan from two parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount of loan outstanding during the year was Rs.3,277.50
lacs and the balance as at the year end is Rs. 3,277.50 lacs.
(c) In my opinion and according to the information and explanations
given to me, the terms and conditions of such loans are not, prima
facie, prejudicial to the interest of the Company. There is no interest
payable on the loans.
(d) In respect of the loans taken, the principal amounts have not
fallen due for payment.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. During the course of my audit, I have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) In my opinion, and according to the information and
explanations given to me the particulars of
contracts or arrangements referred to in Section 301 of the Companies
Act, 1956 have been entered in the register required to be maintained
under that Section.
(b) In my opinion and according to the information and explanations
given to me, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lacs in respect of
any party during the year have been made at prices, which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The company has accepted deposits from the public during the year
and has complied with the provisions of sections 58A, 58AA and the
rules framed there under.
(vii) The Company has an internal audit system, the scope and coverage
of which needs to be increased to maJ
(viii) I am informed that the Central Government has not prescribed
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956.
(ix) (a) According to records of the Company, the Company is generally
regular in depositing undisputed statutory dues, including provident
fund, employees' state insurance, income-tax, sales-tax, wealth tax,
service tax, customs duty, excise duty, cess and any other material
statutory dues applicable to it. There are no arrears of the aforesaid
dues as at 31st March, 2012 outstanding for a period of more than six
months from the date they became payable, except as given below.
There are no dues towards investor education and protection fund.
Statement of arrears of statutory dues outstanding for more than six
months
Particulars Amount Period to
which Due date Date of
(Rs.lacs) the amount
relates payment
Income tax 143.59 2009-10 Not
applicable Not paid
(b) As at 31st March, 2012 according to the records of the Company and
the information and explanations given to me, there are no dues of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, and cess matters that have not been deposited on account of any
dispute, except as given below.
Statement of disputed dues
Particulars Amount Period to which Forum where the
(Rs.lacs) the amount relates dispute is pending
Income tax 236.35 2007-08 Commissioner of
Income Tax (appeals)
402.40 2008-09 Commissioner of
Income Tax (appeals)
Service tax 783.85 2006-07 to
2010-11 Commissioner of
Service Tax
(x) The Company does not have accumulated losses as at 31st March,
2012. The Company has incurred cash losses during the financial
yearended on that date, but has not incurred cash losses during the
immediately preceding financial year.
(xi) In my opinion and according to the information and explanations
given to me, the company, during the year, has not defaulted in
repayment of dues to financial institutions and banks. There are no
debentures as on the balance sheet date.
(xii) According to the information and explanations given to me, the
company has given guarantee, for loans taken by Prajay Properties
Private Limited from banks or financial institutions, the terms and
conditions whereof are not prima facie prejudicial to the interest of
the company.
(xiii) In my opinion and according to the information and explanations
given to me, the term loans were applied for the purposes for which
they were obtained.
(xiv) According to the information and explanations given to me, and on
an overall examination of the balance sheet of the Company, there are
no funds raised on short term basis which have been used for long term
investment.
(xv) During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the Register
maintained under Section 301 of the Act.
(xvi) The Company has not raised any money through a public issue
during the year.
(xvii) To the best of my knowledge and belief and according to the
information and explanations given to me, no fraud on or by the Company
was noticed or reported during the year.
S.V. RANGAN
Chartered Accountant
Membership No. 022037
Place : Secunderabad
Date : August 31, 2012
Mar 31, 2011
1. I have audited the attached Balance Sheet of Prajay Engineers
Syndicate Limited, 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. My responsibility is to express an opinion on
these financial statements based on my audit.
2. I conducted my audit in accordance with auditing standards
generally accepted in India. Those standards require that I 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. I believe that my audit provides a reasonable basis for
my opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, I enclose in the annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Attention is drawn to the following:
a. Note B.18(a) of Schedule 18, in respect of Sundry Debtors,
unsecured considered good outstanding for a period of more than six
months amounting to Rs.26421.37 lacs. For the reasons stated therein, I
am unable to comment on the realizations of the aforesaid debtors.
b. Note B.18(b) of Schedule 18, in respect of advances amounting to
Rs.8514.32 lacs given towards purchase of land/development and
Rs.1671.20 Lacs given to suppliers, etc outstanding from earlier years
in respect of which no provision has been made for the reasons stated
therein.
5. Subject to paragraph 4(a) and further to my comments in the
annexure referred to in paragraph (3) above, I report that:
a) I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purposes of my
audit;
b) in my opinion, proper books of account as required by law have been
kept by the company so far as it appears from my examination of those
books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) in my opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the accounting standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956;
e) for recognizing profit on construction project under an agreement to
sell, stage of completion is determined as a proportion that contract
costs incurred for the work performed bear to the estimated total
costs. Similarly contract revenue is recognized under the percentage of
completion method measured by survey of work performed. Further,
expected loss on contracts is recognized when it is probable that the
total contract costs will exceed the total contract revenue. This
practice is being consistently followed by the Company. For this
purpose, total project/contract costs incurred, and cost to completion
of projects/contracts which is arrived at by the management based on
current technical data, forecast and estimate of net expenditure to be
incurred in future including for contingencies, etc, which being
technical matters have been relied upon by me.
f) in my opinion and to the best of my information and according to the
explanations given to me, the said accounts, read with the notes
thereon, give the information required by the Companies Act, 1956 in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
(ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
6. On the basis of written representations received from the directors
as on March 31, 2011, and taken on record by the Board of Directors, I
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 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of the Auditors' Report of even date to the
members of Prajay Engineers Syndicate Limited)
The nature of the Company's business/ activities during the year is
such that clauses (xii), (xiii), (xiv), (xix) of paragraph 4 of the
Companies (Auditor's Report) Order, 2003 (CARO) are not applicable to
the Company.
(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) As explained to me, all the fixed assets are physically verified by
the management in a phased periodical manner, which in my opinion is
reasonable, having regard to the size of the Company and the nature of
its assets. According to the information and explanations given to me,
no material discrepancies were noticed on such verification.
(c) The fixed assets disposed off during the year, in my opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in my opinion, not affected the going concern
status of the Company.
(ii) (a) The inventories in respect of hotels and resorts have been
physically verified by the management at the year end. In my opinion
the frequency of verification is reasonable.
(b) In my opinion and according to the information and explanations
given to me, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(c) On the basis of my examination of the records of inventory, in my
opinion, the Company is maintaining proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and book records were not material in relation to the operations
of the Company.
(iii) (a) According to the information and explanations given to me,
the Company has not granted any loan secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956 and accordingly clauses iii (b) to iii
(d) of paragraph 4 of CARO are not applicable.
(b) According to the information and explanations given to me, the
Company has taken secured/unsecured loan from two parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount of loan outstanding during the year was Rs.3277.50
lacs and the balance as at the year end is Rs. 3277.50 lacs.
(c) In my opinion and according to the information and explanations
given to me, the terms and conditions of such loans are not, prima
facie, prejudicial to the interest of the Company. There is no interest
payable on the loans.
(d) In respect of the loans taken, the principal amounts have not
fallen due for payment.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. During the course of my audit, I have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) In my opinion, and according to the information and
explanations given to me, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that Section.
(b) In my opinion and according to the information and explanations
given to me, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lacs in respect of
any party during the year have been made at prices, which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The company has accepted deposits from the public during the year
and has complied with the provisions of sections 58A, 58AA and the
rules framed there under.
(vii) The Company has an internal audit system, the scope and coverage
of which needs to be increased to make it commensurate with its size
and nature of the business of the Company.
(viii) I am informed that the Central Government has not prescribed
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956.
(ix) (a) According to records of the Company, the Company is generally
regular in depositing undisputed statutory dues, including provident
fund, employees' state insurance, income-tax, sales-tax, wealth tax,
service tax, customs duty, excise duty, cess and any other material
statutory dues applicable to it. There are no arrears of the aforesaid
dues as at 31st March, 2011 outstanding for a period of more than six
months from the date they became payable. There are no dues towards
investor education and protection fund.
(b) As at 31st March, 2011 according to the records of the Company and
the information and explanations given to me, there are no dues of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, and cess matters that have not been deposited on account of any
dispute.
(x) The Company does not have accumulated losses as at 31st March, 2011
and has not incurred cash losses during the financial year ended on
that date and in the immediately preceding financial year.
(xi) In my opinion and according to the information and explanations
given to me, the company, during the year, has not defaulted in
repayment of dues to financial institutions and banks. There are no
debentures as on the balance sheet date.
(xii) According to the information and explanations given to me, the
company has given guarantee, for loans taken by Prajay Properties
Private Limited from banks or financial institutions, the terms and
conditions whereof are not prejudicial to the interest of the company.
(xiii) In my opinion and according to the information and explanations
given to me, the term loans were applied for the purposes for which
they were obtained.
(xiv) According to the information and explanations given to me, and on
an overall examination of the balance sheet of the Company, there are
no funds raised on short term basis which have been used for long term
investment.
(xv) During the year, the Company has made preferential allotment of
shares to parties and companies covered in the Register maintained
under Section 301 of the Act. The price at which shares have been
issued is not prejudicial to the interest of the Company.
(xvi) The Company has not raised any money through a public issue
during the year.
(xvii) To the best of my knowledge and belief and according to the
information and explanations given to me, no fraud on or by the Company
was noticed or reported during the year.
S V RANGAN
Chartered Accountant
Membership No. 022037
Place: Secunderabad
Date: August 30, 2011
Mar 31, 2010
1. I have audited the attached Balance Sheet of Prajay Engineers
Syndicate Limited, 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. My responsibility is to express an opinion on
these financial statements based on my audit.
2. I conducted my audit in accordance with auditing standards
generally accepted in India. Those standards require that I 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. I believe that my audit provides a reasonable basis for
my opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government in terms of Section 227 (4A) of the Companies
Act, 1956,1 enclose in the annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Attention is drawn to the following:
a. Note B. 18(a) of Schedule 18, in respect of Sundry Debtors,
unsecured considered good outstanding for a period of more than six
months amounting to Rs.27148.39 lacs. For the reasons stated therein I
am unable to comment on the realizations of the aforesaid debtors.
b. Note B.18(b) of Schedule 18, in respect of advances amounting to
Rs.8310.62 lacs given towards purchase of land/ development,
outstanding from earlier years in respect of which no provision has
been made for the reasons stated therein.
5. Subject to paragraph 4(a) and further to my comments in the
annexure referred to in paragraph (3) above, I report that:
a) I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purposes of my
audit;
b) in my opinion, proper books of account as required by law have been
kept by the company so far as it appears from my examination of those
books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) in my opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the accounting standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956;
e) for recognizing profit on construction project under an agreement to
sell, stage of completion is determined as a proportion that contract
costs incurred for the work performed bear to the estimated total
costs. Similarly contract revenue is recognized under the percentage of
completion method measured by survey of work performed. Further,
expected loss on contracts is recognized when it is probable that the
total contract costs will exceed the total contract revenue. This
practice is being consistently followed by the Company. For this
purpose, total project/contract costs incurred, and cost to completion
of projects/contracts which is arrived at by the management based on
current technical data, forecast and estimate of net expenditure to be
incurred in future including for contingencies, etc, which being
technical matters have been relied upon by me.
f) in my opinion and to the best of my information and according to the
explanations given to me, the said accounts, read with the notes
thereon, give the information required by the Companies Act, 1956 in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India;
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2010;
(ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
6. On the basis of written representations received from the directors
as on March 31,2010, and taken on record by the Board of Directors, I
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.
Annexure to the Auditors Report
(Referred to in paragraph 3 of the Auditors Report of even date to the
members of Prajay Engineers Syndicate Limited)
The nature of the Companys business/ activities during the year is
such that clauses (vi), (xii), (xiii), (xiv), xix) of paragraph 4 of
the Companies (Auditors Report) Order, 2003 (CARO) are not applicable
to the Company.
(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) As explained to me, all the fixed assets are physically verified by
the management in a phased periodical manner, which in my opinion is
reasonable, having regard to the size of the Company and the nature of
its assets. According to the information and explanations given to me,
no material discrepancies were noticed on such verification.
(c) The fixed assets disposed off during the year, in my opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in my opinion, not affected the going concern
status of the Company.
(ii) (a) The inventories in respect of hotels and resorts have been
physically verified by the management at the year end. In my opinion
the frequency of verification is reasonable.
(b) In my opinion and according to the information and explanations
given to me, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(c) On the basis of my examination of the records of inventory, in my
opinion, the Company is maintaining proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and book records were not material in relation to the operations
of the Company.
(iii) (a) According to the information and explanations given to me,
the Company has not granted any loan secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956 and accordingly clauses iii (b) to iii
(d) of paragraph 4 of CARO are not applicable.
(b) According to the information and explanations given to me, the
Company has taken unsecured loan from two parties covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount of loan outstanding during the year was Rs.3399.40 lacs
and the balance as at the year end is Rs. 3398.61 lacs.
(c) In my opinion and according to the information and explanations
given to me.the terms and conditions of such loans are not, prima
facie, prejudicial to the interest of the Company. There is no interest
payable on the loans.
(d) In respect of the loans taken, the principal amounts have not
fallen due for payment.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. During the course of my audit, I have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) In my opinion, and according to the information and
explanations given to me, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that Section.
(b) In my opinion and according to the information and explanations
given to me, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lacs in respect of
any party during the year have been made at prices, which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The Company has an internal audit system, the scope and coverage
of which needs to be increased to make it commensurate with its size
and nature of the business of the Company. t
(vii) I am informed that the Central Government has not prescribed
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956.
(viii) (a) According to records of the Company, the Company is
generally regular in depositing undisputed statutory dues, including
provident fund, employees state insurance, income-tax, sales-tax,
wealth tax, service tax, customs duty, excise duty, cess and any other
material statutory dues applicable to it. There are no arrears of the
aforesaid dues as at 31 st March, 2010 outstanding for a period of more
than six months from the date they became payable. There are no dues
towards investor education and protection fund.
(b) As at 31 st March, 2010 according to the records of the Company and
the information and explanations given to me, there are no dues of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, and cess matters that have not been deposited on account of any
dispute.
(ix) The Company does not have accumulated losses as at 31 st March,
2010 and has not incurred cash losses during the financial year ended
on that date and in the immediately preceding financial year.
(x) In my opinion and according to the information and explanations
given to me, the company, during the year, has not defaulted in
repayment of dues to financial institutions and banks. There are no
debentures as on the balance sheet date.
(xi) According to the information and explanations given to me, the
company has not given any guarantees for loans taken by others from
banks or financial institutions.
(xii) In my opinion and according to the information and explanations
given to me, the term loans were applied for the purposes for which
they were obtained.
(xiii) According to the information and explanations given to me, and
on an overall examination of the balance sheet of the Company, there
are no funds raised on short term basis which have been used for long
term investment.
(xiv) During the year, the Company has made preferential allotment of
shares to parties and companies covered in the Register maintained
under Section 301 of the Act. The price at which shares have been
issued is not prejudicial to the interest of the Company.
(xv) The Company has not raised any money through a public issue during
the year.
(xvi)To the best of my knowledge and belief and according to the
information and explanations given to me, no fraud on or by the Company
was noticed or reported during the year.
Place: Secunderabad S V RANGAN
Date: August 14, 2010 Chartered Accountant
Membership No. 022037
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article