Mar 31, 2023
SPML Infra Limited
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the accompanying standalone financial statements of SPML Infra Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of other auditors in respect of certain joint operations, as referred to in the Other Matters section of our report below, except for the effects/possible effects of the matters described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Indian Accounting Standards (âInd ASâ) prescribed under Section 133 of the Act, of the state of affairs of the Company as at 31st March, 2023, its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
As stated in:
a. Note no. 42 to the standalone financial statements, interest on YTM basis amounting to R6,276.13 lakhs (31st March, 2022: R6,027.24 lakhs) was not provided on Optionally Convertible Debentures (âOCDs'') issued to lenders under S4A scheme, which is not in accordance with the requirements of Ind AS 23: Borrowing Costs read with Ind AS 109:Financial Instruments. Had such interest expense been recognized, the finance costs, profit before tax, profit after tax and total comprehensive income would have been impacted to the extent of the aforesaid amount for the year ended 31st March, 2023. Further, since the issue of OCDs , the total liability not provided for in respect of such interest on YTM basis is R29,590.66 lakhs as at 31st March, 2023 (31st March, 2022: R23,314.53 lakhs). The Auditor''s Report for the year ended 31st March, 2022 was also qualified in respect of this matter.
b. Note no. 16.5 to the standalone financial statements, interest expense of R19,951.70 lakhs and R491.86 lakhs on the Company''s borrowings from certain financial creditors (banks) and certain financial creditors (other than banks)
respectively, has not been recognized for the year ended 31st March, 2023 (31st March, 2022: R19,795.66 lakhs and R714.06 lakhs respectively). This is not in accordance with the requirements of Ind AS 23: Borrowing Costs read with Ind AS 109: Financial Instruments. Had the aforesaid interest expenses been recognized, the finance costs, profit before tax, profit after tax and total comprehensive income would have been impacted to the extent of the aforesaid amounts for the year ended 31st March, 2023. The Auditor''s Report for the year ended 31st March, 2022 was also qualified in respect of this matter.
. Note no. 43 to the standalone financial statements, the Company''s trade receivables (net of ECL) as at 31st March, 2023 includes R7,372.07 lakhs (31st March, 2022: R8,066.17 lakhs) relating to certain projects where the claims are presently under arbitration/ litigation proceedings. Pending the ultimate outcome of these matters (fate of which is presently unascertainable), we are unable to comment on the recoverability thereof. The Auditor''s Report for the year ended 31st March, 2022 was also qualified in respect of this matter.
We conducted our audit in accordance with the Standards on Auditing (âSAs'') specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (âICAIâ) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Emphasis of Matters
We draw attention to the following notes to the standalone financial statements:
(i) Note no. 44, regarding uncertainties relating to the recoverability of certain trade & other receivables as at 31st March, 2023 and recognition of interest income thereon, arising out of arbitration awards pronounced in favour of the Company.
(ii) Note no. 41, regarding write back of R603.16 lakhs (31st March, 2022: R727.96 lakhs) in respect of certain credit balances.
(iii) Note no. 47, regarding postponement of recognition of income from interest on unsecured loans given to certain subsidiaries, joint ventures and associates which are impaired fully/partially by way of expected credit losses.
(iv) Note no. 16.4 , which indicates that the Company has defaulted in payment of dues to certain financial creditors and its borrowing facilities with banks are irregular as at 31st March, 2023. Based on the mitigating factors as mentioned in the aforesaid Note no. 16.4, the Company''s Board of Directors is of the view that going concern basis of accounting is appropriate for preparation of the standalone financial statements.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current year. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters described in the Basis for Qualified Opinion section hereinabove, we have determined the matters described below to be the key audit matter to be communicated in our report.
Key Audit Matter |
How our audit addressed the key audit matter |
Pending litigations (refer Note no. 31 to the standalone financial statements ) The Company is subject to number of claims and litigations including arbitrations, mainly with customers and tax authorities. The assessment of the likely outcome of these matters can be judgmental due to the uncertainty inherent in their nature. This area is significant to our audit, since the accounting and disclosure of claims and litigations are complex and judgmental, and the amounts involved are, or maybe, material to the standalone financial statements. |
Principal Audit Procedures: Our audit approach was a combination of test of internal controls and substantive procedures including: ⢠Assessing the appropriateness of the design and implementation of the Company''s controls over the assessment of litigations and completeness of disclosures. Supporting documentations are tested to assess the status of Arbitrations/legal proceedings with reference to related counselors'' views for likely outcome of these matters. |
Information other than the Standalone Financial Statements and Auditorsâ Report thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the standalone financial statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of 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, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015 as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
a. We did not audit the financial statements / financial information of 4 (four) joint operations included in the standalone financial statements, whose financial statements / financial information reflect total assets of R14,010.28 lakhs as at 31st March, 2023, total revenues of R23,440.93 lakhs and total net profit after tax of R21.93 lakhs for the year ended on that date, as considered in the standalone financial statements. These financial statements / financial information have been audited by other auditors whose reports have been furnished to us by the Company''s management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on the audit reports of such other auditors and on the procedures performed by us as stated in the section Auditor''s Responsibilities for the Audit of the Standalone Financial Statements hereinabove.
b. We did not audit the financial statements / financial information of 5 (five) joint operations included in the standalone financial statements, whose financial statements / financial information reflect total assets of R2,224.35 lakhs as at 31st March, 2023, total revenues of R11,347.28 lakhs and total net profit after
tax of R15.23 lakhs for the year ended on that date, as considered in the standalone financial statements. These financial statements / financial information are unaudited and have been furnished to us by the Company''s management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial statements/financial information. In our opinion and according to the information and explanations given to us by the Company''s management, these financial statements / financial information are not material to the Standalone Financial Statements.
c. Owing to non-availability of financial statements/ financial information/financial results of 3 (three) joint operations, the same were not included in the standalone financial statements. According to the information and explanations given to us by the Company''s management, such financial statements/ financial information/financial results are not material to the Standalone Financial Statements.
Our 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, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in 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, based on our audit we report that:
a) We have sought and except for the possible effect of the matters described in the Basis for Qualified Opinion section hereinabove, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) Except for the possible effects of the matters described in the Basis for Qualified Opinion section hereinabove, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account;
d) Except for the effects of the matters described in the Basis for Qualified Opinion section hereinabove, in our
opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended ;
e) The matters described in the Basis for Qualified Opinion section hereinabove may have an adverse effect on the functioning of the Company;
f) On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 from being appointed as a director in terms of Section 164 (2) of the Act.;
g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion section hereinabove;
h) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure -Bâ
i) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note no. 31 to the standalone financial statements;
ii. Except for the possible effects of the matters described in the Basis for Qualified Opinion section hereinabove, the Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on 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.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or
share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including a foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including a foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) of the Companies (Audit
and Auditors) Rules, 2014, as amended, as provided under (a) and (b) above, contain any material misstatement.
v. No dividend has been declared or paid during the year by the Company. Hence, compliance with Section 123 of the Act is not applicable.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023 and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.
3. In our opinion, according to the information and explanations given to us, remuneration paid by the Company to its directors for the year ended 31st March, 2023 has been in accordance with the provisions of section 197 read with Schedule V to the Act;
For Maheshwari & Associates
Chartered Accountants FRN:311008E
CA. Bijay Murmuria
Partner
Place: Kolkata Membership No.: 055788
Date: 13th June, 2023 UDIN: 23055788BGYJQW9579
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of SPML Infra Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
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 Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India. Including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the 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 qualified audit opinion on the standalone Ind AS financial statements.
Basis for Qualified Opinion
Attention is invited to :
(i) Note 43 to the standalone Ind AS financial statements regarding non-provision of interest amounting to Rs.1842.68 lakhs on Optionally Convertible Debentures (OCDs) issued to lenders under S4A scheme. Had such interest provision been made, the finance cost would have been increased by Rs.1842.68 lakhs and profit as well as shareholders fund for the year ended 31 st March, 2018 would have been reduced by Rs.1842.68 lakhs.
(ii) Note 44 to the standalone Ind AS financial statements regarding the Companyâs trade receivables, as at 31st March, 2018 of Rs.3,402.74 lakhs (31st March, 2017 : Rs.11,198.02 lakhs) relating to projects foreclosed by Clients in earlier years and where the claims are presently under arbitration/ litigation proceedings. Pending the ultimate outcome of these matters, which is presently unascertainable, we are unable to comment on the recoverability of the aforesaid trade receivables. The Auditorâs Report for the year ended 31 st March, 2017 was also qualified in respect of this matter.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, 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 specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31st March, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matters
We draw attention to Note 45 to the Standalone Ind AS Financial Statements, regarding uncertainties relating to the recoverability of trade & other receivables of Rs.25460.41 lakhs as at 31 st March, 2018 (31 st March, 2017: Rs.23,358.81 lakhs) and recognition of interest income of Rs.1471.20 lakhs on arbitration awards during the year ended 31 st March, 2018, (for the year ended 31st March, 2017 : Rs.6,603.38 lakhs). All these amounts relate to the appeals filed by clients pending in various courts in relation to the arbitrations awards passed in favor of the Company and recognized in the current period and earlier years. Pending the ultimate outcome of these matters, which is presently unascertainable, no adjustments have been made in the accompanying standalone financial statements.
Our opinion is not modified in respect of this matter.
Other Matters
The Company had prepared separate sets of standalone financial statements for the years ended 31st March, 2017 and 31st March, 2016 in accordance with Accounting Standards prescribed under section 133 of the Act read with Rule7 ofthe Companies (Accounts) Rules, 2014 (as amended) which have been audited by the predecessor auditors, who had issued auditorâs reports dated 19th May, 2017 and 27th May, 2016 respectively, expressing modified opinion with emphasis of matters. These financial statements have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by us. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 [âthe Orderâ], issued by the Central Government of India in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 ofthe Order.
2. As required by Section 143(3) ofthe Act, we report that:
a. We have sought and except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The standalone Ind AS financial statements dealt with by this Report are in agreement with the books of account;
d. Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act;
e. The matters described in the Basis for Qualified Opinion and Emphasis of Matters paragraphs above, in our opinion, may have an adverse effect on the functioning ofthe Company;
f. On the basis ofthe written representations received from the directors as on 31 st March, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March, 2018 from being appointed as a director in terms of Section 164(2) ofthe Act;
g. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;
h. 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 which expressed an unqualified opinion; and
i. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 as detailed in note 30(A);
ii. Except for the possible effect of the matters described in the Basis for Qualified Opinion paragraph, the Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) According to the information and explanations given to us, the Company has a regular program of physical verification of its fixed assets under which the fixed assets are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. I n accordance with this program, certain fixed assets were physically verified during the year and no material discrepancies between the book records and the physical inventory have been noticed on such verification
(c) The title deeds of all the immovable properties (which are included under the head âProperty, Plant and Equipmentâ) are held in the name of Company.
(ii) According to the information and explanations given to us and in our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on such physical verification.
(iii) According to the information and explanations given to us, the Company has granted unsecured loans to companies and other parties covered in the register maintained under section 189 of the Act; and with respect to the same:
(a) in our opinion and according to the information & explanations given to us, the terms and conditions of grant of such loans are not, prima facie, prejudicial to the Companyâs interest;
(b) the schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayments or receipts are regular;
(c) in the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than ninety days and whether reasonable steps have been taken by the Company for recovery of principal and interest.
(iv) In our opinion, Company has complied with the provisions of section 185 and 186 of the Act, to the extent applicable, in respect of loans, investments, guarantees, and security.
(v) In our opinion and according to the information & explanations given to us, the Company has not accepted any deposits within the meaning of sections 73 to 76 of the Act. or any other relevant provisions of the Act. and the rules framed thereunder. Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) In our opinion and according to the information & explanations given to us, the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of section 148 of the Act in respect of the Companyâs products and services and are being made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the books and records as produced before and examined by us and the information and explanations given to us :
(a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax,Goods and Services Tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they become payable are as follows:
(Rs. in Lakhs)
Name of the statute |
Nature of the dues |
Amount |
Period to which the amount relates |
Due Date |
Date of payment |
Professional Tax |
P Tax |
1.15 |
June 2016 to August 2017 |
21 st day of the\ subsequent month |
Not yet paid |
Employee State Insurance,! 948 |
ESI |
6.71 |
June 2016 to August 2017 |
15th day of the subsequent month |
Not yet paid |
Chattisgarh Value Added Tax Act, 2003 |
VAT |
5.96 |
April 2017 to June 2017 |
15th day of the subsequent month |
Not yet paid |
Gujarat Value Added Tax Act, 2003 |
VAT |
25.61 |
Apr 2017 to June 2017 |
15th day of the subsequent month |
Not yet paid |
Gujarat Value Added Tax Act, 2003 |
WOT |
3.82 |
Apr 2017 to June 2017 |
15th day of the subsequent month |
Not yet paid |
Uttar Pradesh Value Added Tax Act, 2008 |
WOT |
141.72 |
Mar 2016 to June 2017 |
15th day of the subsequent month |
Not yet paid |
Delhi Value Added Tax Act, 2005 |
WOT |
11.94 |
Apr 2017 to June 2017 |
15th day of the subsequent month |
Not yet paid |
Jharkhand Value Added Tax Act, 2005 |
WOT |
4.19 |
Apr 2017 to June 2017 |
15th day of the subsequent month |
Not yet paid |
Tripura Value Added Tax Act, 2005 |
WOT |
1.22 |
Apr 2017 to June 2017 |
15th day of the subsequent month |
Not yet paid |
Bihar Value Added Tax Act, 2005 |
WOT |
155.11 |
Apr 2015 to August 2016 |
15th day of the subsequent month |
Not yet paid |
Rajasthan Value Added Tax Act, 2003 |
WOT |
2.09 |
Apr 2017 to June 2017 |
15th day of the subsequent month |
Not yet paid |
West Bengal Value Added Tax Act, 2003 |
WOT |
44.01 |
Apr 2015 to June 2017 |
15th day of the subsequent month |
Not yet paid |
The Orissa Value Added Tax Act, 2004 |
WOT |
1.76 |
Apr 2015 to June 2017 |
15th day of the subsequent month |
Not yet paid |
(b) The dues of income-tax, sales-tax, service tax, duty of customs, duty of excise or value added tax that have not been deposited with the appropriate authorities on account of any dispute, are as follows:
(Rs. in Lakhs)
Name of the statute |
Nature of the dues |
Amount |
Amount paid under Protest |
Period to which the amount relates |
Forum where dispute is pending |
The Income Tax Act, 1961 |
Income tax |
63.41 |
0 |
AY 2007-08 |
CIT Appeal - 3 |
The Income Tax Act, 1961 |
Income tax |
476.31 |
0 |
AY 2014-1 5 |
CIT Appeal - 3 |
The Income Tax Act, 1961 |
Income tax |
604.92 |
0 |
AY 2015-1 6 |
CIT Appeal - 3 |
West Bengal CST Act, 1956 |
Non production of C and E forms |
105.10 |
0 |
FY 2005-06 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
Central Sales Tax Act, 1956 |
Claim exemption u/s 6(2)of Central Sales Tax Act,! 956 |
991.62 |
0 |
FY 2006-07 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
Central Sales Tax Act, 1956 |
Claim exemption u/s 6(2)of Central Sales Tax Act,! 956 |
293.97 |
0 |
FY 2007-08 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal CST Act, 1956 |
Non production of C and E forms |
105.34 |
0 |
FY 2007-08 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
Central Sales Tax Act, 1956 |
Claim exemption u/s 6(2)of Central Sales Tax Act,! 956 |
404.98 |
0 |
FY 2008-09 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
Central Sales Tax Act, 1956 |
Non production of C and E forms |
285.55 |
0 |
FY 2009-10 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal CST Act, 1956 |
Denial of deduction u/s 18(2) of the WB VAT Act |
335.63 |
0 |
FY 2009-10 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal CST Act, 1956 |
Exemption under RGGVY scheme |
137.72 |
0 |
FY 2006-07 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal CST Act, 1956 |
Exemption under RGGVY scheme & Denial of deduction u/s 18(2) oftheWB VAT Act |
95.74 |
0 |
FY 2008-09 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal CST Act, 1956 |
WCT sales taxed improperly, input credit not allowed and interest charged |
20.04 |
0 |
FY 2010-11 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal CST Act, 1956 |
Disallowance of input tax credit, interest charged and demand of purchase and output tax |
75.27 |
0 |
FY 2012-13 |
Senior Joint Commissioner of Sales Tax, Kolkata (South) Circle |
West Bengal CST Act, 1956 |
Disallowance of input tax credit |
40.88 |
0 |
FY 2013-14 |
Joint Commr, Comml Taxes, Central Audit Unit, Kolkata |
Bihar Vat Act, 2005 |
Disallowance of labour component |
43.13 |
0 |
FY 2007-08 |
JCCT Appeals, Patna |
Bihar Vat Act, 2005 |
Denied the exemption u/s 6(2) of the CST Act, on the grounds of pre-determined sales and non-production of statutory forms |
234.17 |
0 |
FY 2010-11 |
JCCT Appeals, Patna |
Central Sales Tax Act, 1956 |
Our CST Sales u/s 6(2) IS ACCEPTED and taxed where Form C and El are due to be received and produced, interest added |
82.12 |
0 |
FY 2011-12 |
JCCT Appeals, Patna |
UP VAT Act, 2008 |
Tax Liability on Exempted project RGGVY sales |
44.13 |
8.82 |
FY 2007-08 |
Additional Commissioner, Agra |
Jharkhand VAT Act, 2005 |
Tax Demand on receipts and suppression of turnover |
193.41 |
0 |
FY 2005-06 to 2010-11 |
JCCT (Appeals) Jamshedpur |
Jharkhand VAT Act, 2005 |
Tax Demand on receipts and suppression of turnover |
38.24 |
0 |
FY 2011-12 |
JCCT (Appeals) Jamshedpur |
Central Sales Tax Act, 1956 |
Tax Demand on receipts and suppression of turnover |
61.53 |
0 |
FY 2011-12 |
JCCT (Appeals) Jamshedpur |
Delhi VAT Act, 2004 |
Miscellaneous Demand |
26.00 |
0 |
FY 2012-2013 |
Commissioner DVAT, Delhi |
Rajasthan VAT Act, 2003 |
Tax liability on interstate Sales |
9.37 |
0 |
FY 2009-10 |
Deputy Commissioner, Appeals-ll Jaipur |
Rajasthan VAT Act, 2003 |
Tax liability on interstate Sales |
110.64 |
0 |
FY 2011-12 |
Deputy Commissioner, Appeals-ll Jaipur |
Finance Act, 1994 |
Service Tax |
23.13 |
0 |
FY 2005-06 to 2006-07 |
Commissioner Service Tax, Kolkata |
(viii) In our opinion and according to the information and explanations given to us, the Company has no loans or borrowings payable to government.
The Company has defaulted in repayment of loans/ borrowings to the following banks and financial institutions:
(Rs.in Lakhs)
Amount |
||
Name of Lender |
||
Upto 90 days |
More than 90 days |
|
Financial Institutions |
||
SREI |
- |
6.14 |
Further, during the year, the Company delayed in repayment of dues to banks and financial institutions as detailed below:
(Rs. in Lakhs)
Amount |
||
Upto 90 days |
More than 90 days |
|
Banks |
||
Canara Bank |
- |
120 |
SBH |
43.7 |
- |
SBI |
416 |
- |
OBC |
11.2 |
- |
SBM |
50 |
- |
Union Bank |
6.10 |
- |
Financial Institutions |
||
IFCI |
357.58 |
- |
The Company is enjoying working capital facility where interest overdrawn amounts to Rs.527 lakhs. As on 31 /03/2018. The Company has not defaulted in repayment of dues to debentureholders.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion, the term loans were applied for the purpose for which the loans were obtained.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of section 197 of the Act read with Schedule 5 to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion, all transaction with the related parties are in compliance with sections 177 and 188 of the Act, where applicable, and the requisite details have been disclosed in the standalone Ind AS financial statements as required by the applicable Ind AS.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures except for allotment of optionally convertible debentures during the year to the lenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) adopted by the Joint Lenderâs Forum as stated in note 13 and note 15 to the standalone financial statements.
(xv) In our opinion, the Company has not entered into any non-cash transactions with directors or persons connected with them covered under section 192 of the Act.
(xvi) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
We have audited the internal financial controls over financial reporting of SPML Infra 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 Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness ofthe 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 Act, to the extent applicable to an audit of internal financial controls. 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the 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 ofthe 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 ofthe Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition ofthe 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, to the best of our information and according to the explanations given to us, 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, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Maheshwari & Associates
Chartered Accountants
FRN:311008E
CA. Bijay Murmuria
Place: Kolkata Partner
Date: 23rd May, 2018 Membership No.: 055788
Mar 31, 2016
Independent Auditor''s Report
To the Members of SPML Infra Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of SPML Infra Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.
Basis for Qualified Opinion
8. As explained in more detail in note 39 to the standalone financial statements, the Company''s trade receivables, fixed assets and inventories as at 31 March 2016 comprise of Rs. 4,829.10 lakhs (31 March 2015: Rs. 4,829.10 lakhs), Rs. 695.49 lakhs (31 March 2015: Rs. 1,084.28 lakhs) and Rs. 500.47 lakhs (31 March 2015: Rs. 557.74 lakhs), respectively, related to contracts which have been foreclosed by customers in earlier years and these are presently under arbitration / litigation proceedings. In absence of sufficient appropriate evidence, we are unable to comment upon the recoverability of the aforesaid trade receivables and carrying value and existence of the aforesaid fixed assets and inventories and the consequential impact, if any, that may arise on settlement of the aforesaid matters.
Qualified Opinion
9. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016, and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
10. We draw attention to note 42 to the standalone financial statements, which indicates the uncertainty relating to the recovery of trade and other receivables amounting to Rs. 15,997.75 lakhs as at 31 March 2016 (31 March 2015: Rs. 19,823.46 lakhs) and recognition of interest income amounting to Rs. 769.68 lakhs during the year ended 31 March 2016 (Rs. 4,280.06 lakhs up to the year ended 31 March 2015). These amounts relates to the litigations pending with various courts with respect to arbitration awards pronounced in favor of the Company and recognized by the Company in the current year and earlier years, wherein the customers have gone into appeals. Pending the final outcome of these litigations, which is presently unascertainable, no adjustment has been recorded in the annual financial statements. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. Further to our comments in Annexure A, as required by Section 143(3) of the Act, we report that:
a. we have sought and except for the possible effect of the matter described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. the standalone financial statements dealt with by this report are in agreement with the books of account;
d. except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph,in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);
e. the matter described in paragraph under the Emphasis of Matters and Basis for Qualified Opinion paragraph, in our opinion, may have an adverse effect on the functioning of the Company;
f. on the basis of the written representations received from the directors as on 31 March 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164(2) of the Act;
g. the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;
h. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 27 May 2016 as per Annexure B expressed an unqualified opinion.
i. with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. as detailed in note 24(a) to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;
ii. except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the Company, as detailed in note 34(b) to the standalone financial statements, has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts 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 A to the Independent Auditor''s Report of even date to the members of SPML Infra Limited, on the financial statements for the year ended 31 March 2016
Annexure A
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of
Fixed assets.
b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of --three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification (except to the extent stated in note 39 of the standalone financial statements).
c) The title deeds of all the immovable properties (which are included under the head ''fixed assets'') are held in the name of the Company.
(ii) In our opinion, the management has conducted a physical verification of inventory at reasonable intervals, except for as stated in note 39, which have not been verified during the year. No material discrepancies between physical inventory and book records were noticed on physical verification of inventory so physically verified.
(iii) The Company has granted unsecured loans to companies and other parties covered in the register maintained under Section 189 of the Act; and with respect to the same:
a) In our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the company''s interest.
b) The schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayments/receipts of the principal amount and the interest are regular;
c) in the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest.
(iv) In our opinion, company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees, and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company''s products and services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited to the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:
Statement of arrears of statutory dues outstanding for more than six months:
Name of the statute |
Nature of the dues |
Amount |
Period to which the amount relates |
Due date |
Date of payment |
Employees Provident Fund,1952 and Employees State Insurance, 1948 |
PF and ESI (including Interest on delayed payment of PF and ESI) |
94.45 |
April 2012 to August 2015 |
Immediate |
Rs. 56.53 lakhs paid on 2-Apr-16 |
Income Tax Act, 1961 |
TDS (including interest on delayed payment of TDS ) |
73.96 |
April 2014 to August 2015 |
7th day of the subsequent month |
Rs. 11.22 lakhs paid on 13-Apr-16 |
Finance Act,1994 |
Service Tax |
4.96 |
April 2014 to August 2015 |
6th day of the subsequent month |
Not yet paid |
The Haryana Value Added Tax Act, 2003 |
Work Contract Tax |
6.37 |
July 2015 |
15th day of the subsequent month |
27-Apr-16 |
Gujarat Value Added Tax Act, 2003 |
Work Contract Tax |
9.23 |
June 2015 to August 2015 |
15th day of the subsequent month |
01-Apr-16 and 03-Jun-16 |
The Bihar Value Added Tax Act, 2005 |
Work Contract Tax |
49.29 |
January 2015 to June 2015 |
21st day of the subsequent month |
Rs. 21.44 lakhs paid on 06-Apr-16 |
The Assam Professions, Trades, Callings and Employments Taxation Act, 1947 |
Professional Tax |
0.02 |
July to August 2015 |
21st day of the subsequent month |
Not yet paid |
b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of exciseand value added tax on account of any dispute, are as follows:
Statement of disputed dues (Amount in Lakhs)
Name of the statute |
Nature of the dues |
Amount |
Amount paid under Protest |
Period to which the amount relates |
Forum where dispute is pending |
The Income Tax Act, 1961 |
Income Tax |
1,936.33 |
- |
AY 2011-12 |
Commissioner of Income Tax, Kolkata |
Karnatka Value Added Tax, 2003 |
Disallowance of Input Tax Credit and TDS |
34.2 |
- |
FY 2012-13 |
JCCT Appeals, Karnatka |
Karnatka Value Added Tax, 2003 |
Karnatka VAT-Excess C/F ITC in the month of July-09 & Duplicate TDS Certificates not considered in Assessment |
51.43 |
- |
FY 2009-10 |
DCCT-Audit 5.1-Koramangala |
Karnatka Value Added Tax, 2003 |
Karnataka CST Case 200910 E1 sales not covered by E1 Forms |
2.62 |
- |
FY 2009-10 |
ACCT Audit 5.1-Koramangala |
Karnatka Value Added Tax, 2003 |
Karnataka VAT -Disallowing all ITC labour & TDS |
1,759.00 |
- |
FY 2010-11 |
DCCT-Audit 5.8-Koramangala |
West Bengal CST Act, 1956 |
Non production of C and E forms |
105.1 |
- |
FY 2005-06 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
Central Sales Tax Act, 1956 |
Claim exemption u/s 6(2) of Central Sales Tax Act, 1956 |
991.62 |
- |
FY 2006-07 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
Central Sales Tax Act, 1956 |
Claim exemption u/s 6(2) of Central Sales Tax Act, 1956 |
293.97 |
- |
FY 2007-08 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal VAT Act, 2003 |
Non production of C and E forms |
105.34 |
- |
FY 2007-08 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
Central Sales Tax Act, 1956 |
Claim exemption u/s 6(2) of Central Sales Tax Act, 1956 |
404.98 |
- |
FY 2008-09 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
Central Sales Tax Act, 1956 |
Non production of C and E forms |
285.55
|
- |
FY 2009-10 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal VAT Act, 2003 |
Denial of deduction u/s 18(2) of the WB VAT Act |
335.63 |
- |
FY 2009-10 |
West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata |
West Bengal VAT Act, 2003 |
Exemption under RGGVY scheme |
137.72 |
- |
FY 2006-07 |
West Bengal Commercial Taxes Appellate & Revision Board, Kolkata |
West Bengal VAT Act, 2003 |
Exemption under RGGVY scheme and denial of deduction u/s 18(2) of the WB VAT for want of adequate documents |
95.74 |
- |
FY 2008-09 |
West Bengal Commercial Taxes Appellate & Revision Board, Kolkata |
West Bengal VAT Act, 2003 |
WCT sales taxed improperly, input credit not allowed and interest charged |
20.04 |
- |
FY 2010-11 |
West Bengal Commercial Taxes Appellate & Revision Board, Kolkata |
West Bengal VAT Act, 2003 |
Denial of deduction u/s 18(2) of the WB VAT Act |
31.93 |
- |
FY 2011-12 |
West Bengal Commercial Taxes Appellate & Revision Board, Kolkata |
West Bengal VAT Act, 2003 |
Disallowance of input tax credit , interest charged and demand of purchase and output tax |
75.27 |
- |
FY 2012-13 |
Senior Joint Commissioner of Sales Tax, Kolkata (South) Circle |
Bihar Vat Act, 2005 |
Disallowance of labour component |
43.13 |
- |
FY 2007-08 |
JCCT Appeals, Patna |
Bihar Vat Act, 2005 |
Denied the exemption u/s 6(2) of the CST Act, on the grounds of pre-determined sales and non-production of statutory forms. |
234.27 |
- |
FY 2010-11 |
JCCT Appeals, Patna |
Central Sales Tax Act, 1956 |
Disallowance of Assessed E-1 Sales out of West Bengal State |
333.73 |
- |
FY 2005-06 to 2007-08 |
Appellate Tribunal, Com. Tax, Range IInd, Agra Remanded back to CTO Agra. |
UP VAT Act, 2008 |
Tax Liability on Exempted project RGGVY sales |
44.13 |
8.82 |
FY 2007-08 |
Additional Commissioner, Agra |
Jharkhand VAT Act, 2005 |
Tax Demand on receipts and suppression of turnover |
195.30 |
- |
FY 2004-05 to 2010-11 |
JCCT (Appeals) Jamshedpur |
Delhi VAT Act, 2004 |
Miscellaneous Demand |
26.00 |
- |
FY 2012-2013 |
Commissioner DVAT, Delhi |
Finance Act, 1994 |
Service Tax on advance received |
23.13 |
- |
FY 2005-06 to 2006-07 |
Commissioner Service Tax, Kolkata |
Rajasthan VAT Act, 2003 |
Tax liability on interstate sales |
9.37 |
- |
FY 2009-2010 |
Deputy Commissioner, Appeals-II Jaipur |
Rajasthan VAT Act, 2003 |
Tax liability on interstate sales |
110.64 |
- |
FY 2011-2012 |
Deputy Commissioner, Appeals-III Jaipur |
(viii) There are no loans or borrowingspayable to government and no dues payable to debenture-holders. The Company has defaulted in repayment of loans/borrowings to the following banks and financial institutions:
(Amount in Lakhs)
Name of lender |
Amount |
|
|
Upto 90 days |
More than 90 days |
Banks |
||
ICICI bank |
188.70 |
- |
Yes bank |
367.28 |
- |
Financial institutions |
||
SREI Equipment Finance Limited |
21.13 |
7.04 |
IFCI |
96.55 |
- |
Further, during the year, the Company delayed in repayment of dues to banks and financial institutions as detailed below:
(Amount in Lakhs)
Name of lender |
Amount |
|
|
Upto 90 days |
More than 90 days |
Banks |
||
ICICI bank |
1,585.53 |
- |
Yes bank |
1,528.99 |
- |
Financial institutions |
||
SREI Equipment Finance Limited |
49.29 |
7.04 |
IFCI |
441.70 |
- |
Daimler Financial Services India Private Limited |
3.98 |
- |
BMW Financial Services Ltd |
3.95 |
1.32 |
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
(xiv) During the year, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) In our opinion, the company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure B of the Independent Auditor''s Report of even date to the members of SPML Infra Limited, on the standalone financial statements for the year ended 31 March 2016
Annexure B
Independent Auditor''s report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
1. In conjunction with our audit of the standalone financial statements of SPML Infra Limited ("the Company") as of and for the year ended 31 March 2016, we have audited the internal financial controls over financial reporting (IFCOFR) of the company of as of that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s Board of Directors is responsible for establishing and maintaining internal financial controls based on 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. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the company''s business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on the Company''s IFCOFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCOFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCOFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCOFR, and their operating effectiveness. Our audit of IFCOFR included obtaining an understanding of IFCOFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s IFCOFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company''s IFCOFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s IFCOFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCOFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCOFR to future periods are subject to the risk that IFCOFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Walker Chandiok & Co LLP For Sunil Kumar Gupta & Co.
(Formerly Walker, Chandiok & Co) Chartered Accountants
Chartered Accountants
Firm''s Registration No.: 001076N/N500013 Firm''s Registration No.: 003645N
per Neeraj Sharma per S.K. Gupta
Partner Partner
Membership No.: 502103 Membership No.: 082486
Place: Gurgaon Place: Gurgaon
Date: 27 May 2016 Date: 27 May 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of SPML
Infra Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
2. Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the maters 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 fows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards specified
under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014 (as amended). This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act 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.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting
and auditing standards and maters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the standalone financial
statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial controls relevant
to the Company's preparation of the financial statements that give a true
and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion
on whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating effectiveness of
such controls. An audit also includes evaluating the appropriateness of
the accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion on the
standalone financial statements.
7. Basis for Qualified Opinion
As stated in Note 39 and 40 to the standalone financial statement, the
company's trade receivables, fixed assets and inventories as at March
31, 2015 comprise of Rs. 4,829.10 lakhs (March 31, 2014: Rs. 1904.78
lakhs), Rs. 1,084.28 (March 31, 2014: Rs. 1,608.00 lakhs) and Rs.
557.74 lakhs, respectively, related to contracts which have been
foreclosed by customers in earlier year and the current year and these
are presently under arbitration/litigation proceedings. During the current
year, the Company has recorded income aggregating to Rs. 834.69 Lakhs in
respect of one of the foreclosed contract which is under arbitration,
which in our opinion is not consistent with the principles of revenue
recognition. In absence of sufficient appropriate evidence, we are unable
to comment upon the recoverability of the aforesaid trade receivables
and the existence and carrying value of the aforesaid inventories and
fixed assets and the consequential impact, if any, on the financial
statements that may arise on settlement of the aforesaid maters. The
Auditor's report on the financial statements for the year ended March
31, 2014 was also qualified in respect of the mater described in Note 39
referred to above.
8. Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the mater
stated in the basis for qualified opinion paragraph above, 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 profit and its
cash flows for the year ended on that date.
9. Emphasis of Mater
We draw attention to note 42 to the standalone financial statements, which
indicates the uncertainty relating to the outcome of litigations pending
with courts/appellate tribunals with respect to arbitration awards
amounting to Rs. 15,543.40 lakhs (including interest of Rs. 4,280.06
lakhs) pronounced in favor of the company and recognized in the books
of account, however, the customers have preferred appeals on such
awards. Pending the final outcome of these litigations, which is presently
unascertainable, no adjustment has been recorded in the statement. Our
audit report is not qualified in respect of this mater.
10. Other Maters
We did not audit the financial statements of two unincorporated
integrated joint ventures, included in the standalone financial
statements, whose financial statements reflect Company's share in profit
of Rs. 17.53 lakhs for the year ended March 31, 2015. These financial
statements have been audited by other auditors whose reports have been
furnished to us, by the management, and our opinion on the standalone
financial statements of the Company for the year then ended to the
extent relate to the financial statements not audited by us as stated in
this paragraph is based on solely on the audit reports of the other
auditors. Our opinion is not modified in respect of this mater.
We did not audit the financial statements of an unincorporated
integrated joint venture, included in the standalone financial
statements, whose financial statements reflect Company's share in profit
of Rs. 8.35 lakhs for the year ended March 31, 2015. These financial
statements have been certified by the Company's management, and our
opinion on the standalone financial statements of the Company for the
year then ended to the extent they relate to the financial statements as
stated in this paragraph is based solely on, on such management certified
financial statements. Our opinion is not modified in respect of this
mater.
The standalone financial statements of the company for the year ended
March 31, 2014 were audited jointly by another auditor and Sunil Kumar
Gupta & Co who had expressed a qualified opinion on those financial
statements vide their report dated May 29, 2014. Sunil Kumar Gupta &
Co., continues to be Joint auditor for the current year ended March 31,
2015.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure a statement on the maters
specified in paragraphs 3 and 4 of the Order.
As required by Section 143(3) of the Act, we report that:
a. we have sought and (except for the possible effect of the mater
described in the Basis for Qualified Opinion paragraph) obtained all the
information and explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit;
b. except for the possible effect of the mater described in the Basis
for Qualified Opinion paragraph, in our opinion, proper books of account
as required by law have been kept by the Company so far as it appears
from our examination of those books;
c. the standalone financial statements dealt with by this report are in
agreement with the books of account;
d. except for the possible effects of the mater described in the Basis
for Qualified Opinion paragraph, in our opinion, the aforesaid
standalone financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014 (as amended);
e. the mater described under the Emphasis of Mater/ Basis of Qualified
opinion paragraph in our opinion, may have an adverse effect on the
functioning of the Company;
f. on the basis of the written representations received from the
directors and taken on record by the Board of Directors, none of the
directors is disqualified as at March 31, 2015 from being appointed as a
director in terms of Section 164(2) of the Act;
g. with respect to the other maters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. as detailed in Note 25 to the standalone financial statements, the
Company has disclosed the impact of pending litigations on its standalone
financial position;
ii. Except for the possible effect of the mater described in the Basis
for Qualified Opinion paragraph, the Company, as detailed in Note 34(b)
to the standalone financial statements, has made provision, as required
under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts. The Company did not
have any derivative contracts for which there were any material
foreseeable losses
iii. there has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditor's Report of even date to the
members of SPML Infra Limited, on the financial statements for the year
ended March 31, 2015
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and taking
into consideration the information and explanations given to us and the
books of account and other records examined by us in the normal course
of audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its
fixed assets under which fixed assets are verified in a phased manner over
a period of three years, which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets. No
material discrepancies were noticed on such verification (except to the
extent stated in note 39 of the financial statements).
(ii) (a) The management has conducted a physical verification of
inventory at reasonable intervals, except for as stated in note 40,
which have not been verified during the year.
(b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies between physical inventory and book records were
noticed on physical verification.
(iii) The Company has granted unsecured loans to companies, firms or
other parties covered in the register maintained under Section 189 of the
Act, and with respect to the same:
(a) the terms of repayment of the principal amount and the payment of
the interest have not been stipulated and hence we are unable to comment
as to whether receipt of the principal amount and the interest is
regular; and
(b) in the absence of stipulated terms and conditions, we are unable to
comment as to whether there is any overdue amount in excess of Rs. one
lakh and whether reasonable steps have been taken by the Company for
recovery of the principal amount and interest.
(iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the sale
of goods and services. During the course of our audit, no major
weakness has been noticed in the internal control system in respect of
these areas.
(v) The Company has not accepted any deposits within the meaning of
Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits)
Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of
the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under sub-Section (1) of Section 148 of the
Act in respect of Company's products and services and are of the
opinion that, prima facie, the prescribed accounts and records have
been made and maintained. However, we have not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund,
employees' state insurance, income-tax, sales-tax, wealth tax, service
tax, duty of custom, value added tax, cess and other material statutory
dues, as applicable, have not been regularly deposited with the
appropriate authorities and, there has been significant delays in large
number of cases. The Company did not have any dues towards excise duty
during the year. Undisputed amounts payable in respect thereof, which
were outstanding at the year-end for a period of more than six months
from the date they become payable are as follows:
Name of the statute Nature of the dues Amount (Rs Period to
which the
in lakhs) amount relates
Employees Provident
Fund, Interest on delayed
payment of 13.33 2012-13
to 2013-14
1952 and Employees
State PF and ESI
Insurance, 1948
Employees Provident Interest on delayed
payment of 6.07 April, 2014 to
Fund,1952 and
Employees PF and ESI September, 2014
State Insurance,
1948
Income Tax Act,
1961 TDS (including interest
on 14.65 April, 2014 to
delayed payment of TDS) September, 2014
The Haryana Value
Added Work Contract Tax 0.60 June, 2014 and
Tax Act, 2003 September, 2014
The Utar Pradesh
Added Work Contract Tax 0.27 May, 2014
Tax Act,2008
The Rajasthan Value
Added Work Contract Tax 1.10 April, 2014 to
June,
Tax Act,2003 2014
Name of the Statute Due date Date of
payment
Employees Provident Immediate Not yet paid
Fund, 1952 and
Employees state
Insurance 1948
Employees Provident Immediate Not yet paid
Fund,1952 and
Employees State
Insurance 1948
Income Tax Act 1961 7th day of the subse- Not yet paid
quent month
The Haryana Value 15th day of the sub- April 4, 2015
sequent month
Added Tax Act,2003
The Uttar Pradesh 15th day of the sub- April 8, 2015
sequent month
Added Tax Act,2008
The Rajastan Value 15th day of the sub- Not yet paid
sequent month
Added Tax Act,2003
(b) The dues outstanding in respect of income-tax, sales-tax, duty of
excise, value added tax and cess and service tax on account of any
dispute are as follows:
Name of the Nature of
dues Amount Amount paid
statute (Rs. in under protest
lakhs) (Rs. in lakhs)
The Income Tax Income Tax 1,527.73 NIL
Act, 1961
The Income Tax Income Tax 2,059.02 NIL
Act, 1961
West Bengal CST Non production of C forms 105.10 NIL
Act, 1956
West Bengal CST CST 6(2) sales determined
as per 991.62 NIL
Act, 1956 conceived sale and taxed
at full rates
West Bengal CST CST Purchases from West
Bengal for 293.97 NIL
Act, 1956 sales outside WB projects
u/s 6(2)
and taxed under WCT
West Bengal CST CST 6(2) sales determined
as per 105.34 NIL
Act, 1956 conceived sale and taxed
at full rates
West Bengal CST CST 6(2) sales determined
as per 404.98 NIL
Act, 1956 conceived sale and taxed
at full rates
West Bengal CST CST 6(2) sales taxed &
interest 285.00 NIL
Act, 1956 charged - Denial of
exemption u/s
6(2) of CST Act for
non-production of
statutory declaration
forms 'E'
West Bengal VAT Denial of deduction under
WCT & in- 335.63 NIL
Act, 2003 terest charged - Denial
of deduction
u/s 18(2) of the WB VAT
Act for want of documents
and other miscella-
neous issues
West Bengal VAT Disallowance of RGGVY
Sales 137.72 NIL
Act, 2003
West Bengal VAT Sub-contractors' payments
not 95.74 NIL
Act, 2003 accepted, taxed and
interest added
- Denial of deduction
u/s 18(2) of
the WB VAT for want
of adequate
documents
West Bengal VAT WCT sales taxed improperly,
input 20.04 NIL
Act, 2003 credit not allowed
and interest
charged
West Bengal VAT WCT sales taxed improperly,
input 31.93 NIL
Act, 2003 credit not allowed in full
and interest
charged
Bihar Vat Act, Disallowance of labour
component 43.13 NIL
2005
Bihar Vat Act, Department has denied the
exemp- 234.27 NIL
2005 ton u/s 6(2) of the CST
Act, on the
grounds of pre-determined
sales and
non-production of statutory
forms.
Central Sales
Tax Disallowance of Assessed
E-1 Sales 333.73 NIL
Act, 1956 out of West Bengal State
UP VAT Act, Tax Liability on Exempted
project 44.13 8.82
2008 RGGVY sales
UP VAT Act, Miscellaneous Demand 6.95 NIL
2008
Name of the Statute Period to Forum where dispute is
which the pending
amount
relates
The Income Tax Act,1961 AY 2011-12 Commissioner of Income
Tax, Kolkata
The Income Tax Act,1961 AY 2012-13 Commissioner of Income
Tax, Kolkata
West Bengal CST Act,1956 2005-06 President, Appellate and
Revision Board, Kolkata
West Bengal CST Act,1956 2006-07 President, Appellate and
Revision Board, Kolkata
West Bengal CST Act,1956 2007-08 President, Appellate and
Revision Board, Kolkata
West Bengal CST Act,1956 2007-08 Sr. Joint Commissioner,
Commercial Taxes (South
Circle), Kolkata, President,
Appellate and Revision
Board, Kolkata
West Bengal CST Act,1956 2008-09 President, Appellate &
Revision Board, Kolkata
West Bengal CST Act,1956 2009-10 President, Appellate &
Revision Board, Kolkata
West Bengal CST Act,1956 2009-10 President, Appellate &
Revision Board, Kolkata
West Bengal CST Act,1956 2006-07 President, Appellate &
Revision Board, Kolkata
West Bengal CST Act,1956 2008-09 President, Appellate &
Revision Board, Kolkata
West Bengal CST Act,1956 2010-11 President, Appellate &
Revision Board, Kolkata
West Bengal CST Act,1956 2011-12 Senior Joint Commissioner,
Commercial Taxes, Kolkata
(S) Circle
Bihar Vat Act,2005 2007-08 JCCT Appeals, Patna
Bihar Vat Act,2005 2010-11 JCCT Appeals, Patna
Central Sales
Tax,1956 2005-06 to Additional Commissioner,
2007-08 Agra
UP VAT Act,2008 2007-08 Additional Commissioner,
Agra
UP VAT Act,2008 2008-09 Additional Commissioner,
Agra
Name of the Name of Dues Amount Amount
Statute paid
(Rs.in under
lakhs) protest
amount
relates
Jharkhand VAT Tax Demand on receipts and
suppres- 195.30 NIL
Act, 2005 sion of turnover
Delhi VAT Act, Miscellaneous Demand 26.00 NIL
2004
Central Excise Penalty u/s 26 of Central
Excise 2002 52.64 NIL
Act, 1944
Finance Act, Service Tax on advance
received 23.13 NIL
1994
Central Sales
Tax Disallowance of Assessed
E-1 Sales 18.53 NIL
Act, 1956
Rajasthan VAT Tax liability on interstate
sales 9.37 NIL
Act, 2003
Rajasthan VAT Tax liability on interstate
sales 110.64 NIL
Act, 2003
Name of the Statute Period to Forum where dispute
which the is pending
amount
relates
Jharkhand VAT Act2008 2004-05 to JCCT (Appeals) Jamshedpur
2010-11
Delhi VAT Act,2004 2012-2013 Commissioner DVAT, Delhi
Central excise Act,1944 2004-05 to CESTAT, Mumbai
2005-06
Finance Act,1994 2005-06 to Commissioner Service Tax,
2006-07 Kolkata
Cental Sales Act,1956 2008-2009 The Assistant Commis-
sioner (CT), Audit, DVO,
Bangalore
Rajasthan VAT Act,2003 2009-2010 Deputy Commissioner,
Appeals-II Jaipur
Rajasthan VAT Act,2003 2011-2012 Deputy Commissioner,
Appeals-III Jaipur
(C) The Company has transferred the amount required to be transferred
to the investor education and protection fund in accordance with the
relevant provisions of the Companies Act, 1956 (1 of 1956) and rules
made thereunder within the specified time.
(viii) Without considering the possible effects if any, of the mater
stated in, Basis for Qualified opinion paragraph of our audit report, in
our opinion, the Company has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
the immediately preceding financial year.
(ix) During the year, the Company has delayed in repayment of principal
and interest to banks and financial institutions. The delays with respect
to principal and interest upto 90 days amounted to Rs. 6,276.12 lakhs
and Rs. 919.62 lakhs, respectively; the delays between 91 to 180 days
amounted to Rs. 317.78 lakhs and Rs. 1.76 lakhs, respectively to banks
and financial institutions.
As at the year end, the Company has defaulted in repayment of loan and
interest aggregating to Rs. 312.50 lakhs and Rs. 35.73 lakhs respectively
to banks. As at the balance sheet date, the periods of delays in these
cases were up to 90 days.
(x) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xi) In our opinion, the Company has applied the term loans for the
purpose for which these loans were obtained.
(xii) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For Walker Chandiok & Co LLP For SUNIL KUMAR GUPTA & CO.
Chartered Accountants Chartered Accountants
Firm Registration Number: 001076N/N500013 Firm Registration No : 003645N
per Neeraj Sharma per S.K. Gupta
Partner Partner
Membership No. 502103 Membership No. 082486
Gurgaon, May 29, 2015 Gurgaon, May 29, 2015
Mar 31, 2014
We have audited the accompanying financial statements of SPML Infra
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 accountng policies
and other explanatory informaton.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparaton of these financial
statements that give a true and fair view of the financial positon,
financial performance and cash flows of the Company in accordance with
accountng principles generally accepted in India, including the
Accountng Standards notfed under the Companies Act, 1956 read with
General Circular 8/2014 dated April 4, 2014, issued by the Ministry of
Corporate Afairs. This responsibility includes the design,
implementaton and maintenance of internal control relevant to the
preparaton and presentaton of the financial statements that give a true
and fair view and are free from material misstatement, whether due to
fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditng issued by the Insttute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparaton and
fair presentaton 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 efectveness of the entty''s
internal control. An audit also includes evaluatng the appropriateness
of accountng policies used and the reasonableness of the accountng
estmates made by management, as well as evaluatng the overall
presentaton of the financial statements. We believe that the audit
evidence we have obtained is sufcient and appropriate to provide a
basis for our audit opinion.
Basis for qualifed opinion
Atenton is drawn to Note No. 41 (a) to the financial statements
regarding complete foreclosure of a contract by a customer during the
year, at the risk and cost of the Company. Although the Company has
fled its counter claims, the customer has not yet raised any claims on
the Company and the mater is presently pending with Hon''ble Supreme
Court for appointment of an independent arbitrator. In view of the
uncertaintes involved, we are unable to comment on the ultmate outcome
of the litgaton and also on the recoverability of the account
receivables and fixed assets of Rs.1,904 lakhs and Rs.1,608 lakhs
respectvely, as on March 31, 2014, in respect of the said contract.
Opinion
Except for the possible efects of the mater stated in the basis for
qualifed opinion paragraph above, In our opinion and to the best of our
informaton and according to the explanatons given to us, the financial
statements give the informaton required by the Companies Act, 1956
("the Act") in the manner so required and give a true and fair view in
conformity with the accountng principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of afairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Mater
Atenton is drawn to Note No. 44 to the financial statements regarding
the recogniton of income of Rs.12,520.34 lakhs during the year arising
out of arbitraton awards pronounced in favour of the Company (including
Rs.10,952.02 lakhs in respect of arbitraton awards pronounced in
earlier years) and interest of Rs.2,902.94 lakhs recognised thereon and
also of the arbitraton awards of Rs. 3028.30 lakhs recognized in the
previous year, both remaining outstanding as on March 31, 2014, against
which the customers have preferred appeals.
Our audit opinion is not qualifed in respect of the above mater.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-secton (4A) of secton 227 of the Act, we give in the Annexure a
statement on the maters specified in paragraphs 4 and 5 of the Order.
2. As required by secton 227(3) of the Act, we report that:
(a) We have obtained all the informaton and explanatons which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examinaton of those
books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accountng Standards notfed
under the Companies Act, 1956 read with General Circular 8/2014 dated
April 4, 2014, issued by the Ministry of Corporate Afairs;
(e) On the basis of writen representatons received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualifed as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-secton (1) of
secton 274 of the Companies Act, 1956.
Annexure referred to in of our independent auditor report of even date
Re: SPML INFRA LIMITED (the Company)
(i) (a) The Company has maintained proper records showing full
partculars, including quanttatve details and situaton of fixed assets.
(b) Except to the extent stated in note no. 41 (a) of the financial
statements, fixed assets were physically verifed by the management
during the yea in accordance with a planned programme of verifying all
the fixed assets over a period of three years which, in our opinion, is
reasonable havin regard to the size of the Company and the nature of
its assets. As informed, no material discrepancies were Noticed on such
verification.
(c) There was no substantal disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verifcaton of inventory
at reasonable intervals during the year.
(b) The procedures of physical verifcaton of inventory followed by the
management are reasonable and adequate in relaton to the size of th
Company and the nature of its business.
(c) According to the informaton and explanatons given to us, the
Company is maintaining proper records of inventory and no material
discrepancie were Noticed on physical verifcaton.
(iii) (a) The Company has granted loans to six partes covered in the
register maintained under Secton 301 of the Companies Act, 1956. The
maximu amount involved during the year was Rs.2,916.44 lakhs and the
year end balances of loans granted to such partes was Rs. 2,328.76
lakhs.
(b) In our opinion and according to the informaton and explanatons
given to us, the rate of interest and the terms and conditons for the
abov loans are not prima facie prejudicial to the interest of the
Company.
(c) The above loans are stated to be repayable on demand. As informed,
the repayment of above loans, to the extent demanded by the Compan has
been received during the year and thus, there was no default on the
part of the borrowers. The payment of interest with respect to suc
loans is stated to have been regular.
(d) In view of the above loans being repayable by the partes on demand,
there is no overdue amount of loans granted to such partes.
(e) The Company has not taken any loans, secured or unsecured, from
companies, firms or other partes covered in the register maintained unde
secton 301 of the Companies Act, 1956. Accordingly, the provisions of
clause 4(iii) (e) to (g) of the Order are not applicable to the Company
an hence not commented upon.
(iv) In our opinion and according to the informaton and explanatons
given to us, there is an adequate internal control system commensurate
with th size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During th course of our audit, we have not observed any major
weakness or contnuing failure to correct any major weakness in the
internal control system o the company in respect of these areas.
(v) (a) According to the informaton and explanatons provided by the
management, we are of the opinion that the partculars of contracts or
arrangement referred to in secton 301 of the Companies Act, 1956 that
need to be entered into the register maintained under secton 301 have
been so entered (b) The Company has entered into certain transactons,
with Companies having common director, which require prior approval of
Central Governmen u/s 297 of the Companies Act, 1956, as more fully
disclosed in note nos. 47 (a) to 47 (c) of the financial statements.
While in respect of the Companie mentoned in note nos. 47 (a) & 47 (b),
the necessary applicaton has been fled/ is in the process of being fled
with the Central Government. I view of non-approval of the applicaton
for the contract stated in note no. 47 (c) by the Central Government,
as informed by the management, th Company is in the process of fling
for compounding under the relevant provisions of the Companies Act.
Except as stated above, in our opinio and according to the informaton
and explanatons given to us, the transactons made in pursuance of such
contracts or arrangements exceedin the value of Rupees Five lakhs have
been entered into during the financial year at prices which are
reasonable having regard to the prevailin market prices at the relevant
tme.
(vi) As informed, the Company has not accepted any deposits from the
public within the purview of Sectons 58A and 58AA of the Companies Act,
195 and the rules framed thereunder.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenanc of cost records under secton 209(1)(d) of the Companies Act,
1956, in respect of its constructon actvites and are of the opinion
that prima faci the prescribed accounts and records have been made and
maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
educaton and protecton fund, employees'' state insurance, income-tax,
sales-ta wealth-tax, service tax, customs duty and cess to the extent
applicable, have not been regularly deposited with the appropriate
authorites an there have been significant delays in a number of cases.
The Company did not have any dues towards excise dutes during the year.
(b) According to the informaton and explanatons given to us, undisputed
dues in respect of provident fund, investor educaton and protecton fun
employees'' state insurance, income-tax, wealth-tax, sales tax, customs
duty, excise duty, employees'' state insurance, cess and other materi
statutory dues which were outstanding at the year-end for a period of
more than six months from the date they became payable, are as follow
Name of the
statute Nature of the dues Amount (Rs Period to which the
in lakhs) amount relates
The Bihar
Value Added Works Contract Tax 384.42 2008-09 to
Tax Act, 2005 (including interest) 2013-14
Finance Act,
1994 Interest on delayed 66.43 2011-12 to
payment of Service
Tax 2013-14
The Bihar Value
Added Interest on delayed 72.00 2007-2008 to
Tax Act, 2005 payment of Entry Tax 2012-13
Employees
Provident Interest on delayed 33.46 2012-13 to
Fund, 1952 payment of Provident
Fund 2013-14
Name of the statue Due Date Date of
Payment
The Bihar Value Added
Tax Act, 2005 20th day of Not yet paid
subsequent month
Finance Act, 1994 Immediate Not yet paid
The Bihar Value Added
Tax Act, 2005 Immediate Not yet paid
Employees Provident
Fund, 1952 Immediate Not yet paid
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the
statute Nature of the dues Amount (Rs Period to which the
in lakhs) amount relates
West Bengal Non-Producton of
"C" Forms 105.10 2005-06
CST Act, 1956
CST 6(2) sales
determined as per 991.62 2006-07
conceived sale and
taxed at full rates
CST purchases from
West Bengal 293.97 2007-08
(WB) for sales
outside WB projects
u/s 6(2) and
taxed under WCT
CST 6(2) sales
determined as per 105.34 2007-08
conceived sale and
hence taxed at
785.45 2008-09
full rates
343.60
Disallowance of
E1 sales 0.59 2010-11
West Bengal Disallowance of
Rajiv Gandhi Grameen 137.72 2006-07
VAT Act Vidyutkaran Yojna
(RGGVY) Sales
Local Sale and RGGVY
sales are 261.70 2008-09
added to WCT and taxed
344.14 2009-10
Bihar VAT Act Disallowance of
labour component 320.04 2006-07to
Utar Pradesh Disallowance of 2009-10
Assessed E-1 Sales 333.73 2005-06to
CST Act out of West Bengal
State 2007-08
Uttar Pradesh Tax Liability on
Exempted project 44.13 2007-08
VAT Act RGGVY Sales
Miscellaneous
Demand 6.95 2008-09
Jharkhand VAT Disallowance of
Assessed E-1 1,313.74 2004-05 to
Act Sales out of West
Bengal State/ 2010-11
Suppression of Turnover
Delhi VAT Act Miscellaneous
Demand 26.00 2012-13
Central Excise Penalty under Rule
26 of Central 52.64 2004-05 to
Act,1944 Excise 2002 2005-06
Finance Act, Service tax on advance
received 23.13 2005-06to
1994 2006-07
Madhya VAT Demand 385.30 2010-11
Pradesh VAT
Act
Andhra Disallowance of E-1
Sales 169.22 2009-10
Pradesh VAT
Act Disallowance of
Input VAT 557.01
Karnataka CST Disallowance of E-1
Sales 2,598.23 2007-08
Act
590.47 2008-09
Rajasthan VAT Tax liability on
interstate sales 90.68 2009-10
Act
Name of the Statue Forum where
dispute is pending
West Bengal
CST Act, 1956 President, Appellate and
Revision Board, Kolkata
President, Appellate and
Revision Board, Kolkata
President, Appellate and
Revision Board, Kolkata
Sr. Joint Commissioner,
Commercial Taxes (South Circle), Kol-
kata President, Appellate and Revision
Board, Kolkata
Additonal Commisioner,
Commercial Tax, Kolkata
West Bengal
VAT Act President, Appellate and Revision
Board, Kolkata
Sr. Joint Commissioner, Commercial
Taxes (South Circle), Kolkata
Bihar VAT Act JCCT, Appeals, Patna
Utar Pradesh
CST Act Additonal Commissioner- Agra
Utar Pradesh
VAT Act Additonal Commissioner- Agra
Jharkhand VAT
Act Joint Commissioner, Ranchi
Delhi VAT Act Commissioner DVAT, Delhi
Central Excise
Act,1944 CESTAT, Mumbai
Finance Act,
1994 Commissioner Service Tax, Kolkata
Madhya
Pradesh VAT
Act CTO Bhopal, VAT Circle
Andhra
Pradesh VAT
Act The Appellate Deputy
Commissioner(CT) Punjaguta Division,
Hyderabad
Karnataka CST
Act The Assistant Commissioner(CT) Audit,
DVO, Bangalore
Rajasthan VAT
Act Deputy. Commissioner,
Appeals - II, Jaipur
(x) Without considering the consequental effect, if any, of the mater
stated in "Basis for qualified opinion" paragraph of our auditors''
report, the Company has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
(xi) Based on our audit procedures and as per the informaton and
explanatons given by the management during the year, the Company has
delayed in repayment of term loans (including interest) to banks to the
extent of Rs. 3,928.46 lakhs, which were regularised over a period of
tme, with an overall delay of less than 90 days. Out of above, Rs.
113.60 lakhs overdue as on the balance sheet date relates to interest
on term loan paid subsequently. The Company has not defaulted in
repayment to dues to financial insttutons. The Company did not have any
dues towards debenture holders during the year.
(xii) According to the informaton and explanatons given by the
management and based on the documents and records produced to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securites.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securites, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the informaton and explanatons given to us, the
Company has given guarantee for loans taken by others from bank or
financial insttutons, the terms and conditons whereof, in our opinion,
are not prima-facie prejudicial to the interest of the Company.
(xvi) Based on the informaton and explanatons given to us by the
management, term loans were applied for the purpose for which these
loans were obtained.
(xvii) According to the informaton and explanatons given to us and on
an overall examinaton of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferental allotment of shares
during the year to partes or companies covered in the register
maintained under secton 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reportng the true and fair view of the financial statements and as per
the informaton and explanatons given by the management, we report that
no fraud on or by the Company has been Noticed or reported during the
course of our audit.
For S. R. Batliboi & Co. LLP For Sunil Kumar Gupta & Co.
Chartered Accountants Chartered Accountants
Firm Registraton No.301003E Firm Registraton No.003645N
per Raj Agrawal per S. K. Gupta
Partner Partner
Membership No. 082028 Membership No. 82486
Place of Signature: Gurgaon Place of Signature: Gurgaon
Date: May 29, 2014 Date: May 29, 2014
Mar 31, 2013
1. Report on the financial statements
We have audited the accompanying financial statements of SPML Infra
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
3. Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
4. Basis for qualified opinion
Attention is drawn to Note No. 43 in respect of a contract partially
terminated by the client, the matters relating to settlement of claims,
counter claims and consequential damages whereof are presently
sub-judice. Accordingly, we are unable to comment about the impact, if
any, of the aforesaid termination on the related contract value,
contract cost and unbilled revenue and its consequential impact on the
profit for the year and the reserves and surplus of the company as at
the Balance Sheet date.
The audit report for the year ended March 31, 2012 was also modified
for the above matter.
5. Qualified Opinion
Except for the possible effect of the matter stated in paragraph 4
above, in our opinion and to the best of our information and according
to the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
6. Emphasis of Matter
Attention is drawn to Note No.48 to the financial statements regarding
the arbitration claims of Rs.6,624.71 lakhs (including Rs.3,596.41
lakhs awarded in an earlier year) having been recognised in the books
as income during the year as the management believes that these awards
have reached their finality and it is confident to recover these
arbitration claims in full. Our opinion is not qualified in respect of
this matter.
7. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
(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 disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 7(1) under the heading "Report on
other legal and regulatory requirement" of our report of even date
Re: SPML INFRA LIMITED (the Company)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed Assets were physically verified by the management during the
year in accordance with a planned programme of verifying all the fixed
assets over a period of three years, which in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. As informed, no material discrepancies were noticed on such
verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) According to the information and explanations given to us, the
Company is maintaining proper records of inventory and no material
discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loans to four parties covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs.2,740.83 lakhs and the
year end balances of loans granted to such parties was Rs. 2,698.79
lakhs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and the terms and conditions for the
above loans are not prima facie prejudicial to the interest of the
Company.
(c) The above loans are stated to be repayable on demand. As informed,
the repayment of above loans, to the extent demanded by the Company,
has been received during the year and thus, there was no default on the
part of the borrowers. The payment of interest with respect to such
loans is stated to have been regular.
(d) In view of the above loans being repayable by the parties on
demand, there is no overdue amount of loans granted to such parties.
(e) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, the
provisions of clause 4(iii) (e) to (g) of the Order are not applicable
to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding the value of Rupees Five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) As informed, the Company has not accepted any deposits from the
public within the purview of Sections 58A and 58AA of the Companies
Act, 1956 and the rules framed there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, in respect of its construction activities and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty and cess
to the extent applicable, have not been regularly deposited with the
appropriate authorities and there have been significant delays in a
number of cases.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, investor education and
protection fund, employees'' state insurance, income-tax, wealth-tax,
sales tax, customs duty, excise duty, employees'' state insurance, cess
and other material statutory dues which were outstanding at the
year-end for a period of more than six months from the date they became
payable, are as follows:
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information,
explanations and documents produced to us by the management, we are of
the opinion that the Company has not defaulted in repayment of dues to
banks or financial institutions. The Company has no outstanding dues
from any debenture holders.
(xii) According to the information and explanations given by the
management and based on the documents and records produced to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from bank or
financial institutions, the terms and conditions whereof, in our
opinion, are not prima-facie prejudicial to the interest of the
Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
loans were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S. R. Batliboi & Co. LLP For Sunil Kumar Gupta & Co.
Firm Registration No.301003E Firm Registration No.003645N
Chartered Accountants Chartered Accountants
Per R. K. Agrawal S. K. Gupta
Partner Partner
Membership No.16667 Membership No.82486
Place : Gurgaon Place : Gurgaon
Date : May 27, 2013 Date : May 27, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of SPML Infra Limited
('the Company') as at March 31, 2012 and also the Statement of Profit
and Loss and the Cash Flow Statement for the year ended on that date,
annexed thereto. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 221 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Attention is drawn to the following notes to the financial
statements :
(a) Note No. 32 regarding accounting of share of loss (net) amounting
to Rs. 433.85 lakhs from seven Joint Ventures on the basis of unaudited
financial statements as certified by the management. Further
adjustments, if any, on this account are presently not ascertainable.
(b) Note No.44 regarding non provision of tax liability of Rs. 7482.04
lakhs as on March 31, 2012 (including Rs. 6,907.64 lakhs upto March 31,
2011) arising on account of the amendment to Section 80IA of the Income
Tax Act, 1961 in the Finance Act, 2009. The Company has filed a writ
with the Hon'ble High Court at Calcutta, challenging the validity of
the above retrospective amendment, which as per legal opinion obtained
by the Company, is ultra vires to the main section of the above Act.
The income tax officer has since disallowed the aforesaid claim of the
Company in view of the said retrospective amendment, against which the
Company has filed appeals with the appellate authorities. Till the
matter is decided by the Hon'ble High Court, the liability, if any, in
this regard is unascertainable. We are unable to comment on the impact
of the above non-provision of tax on the Company's profit for the year
and reserves and surplus at the year end. Further, because of the
above, the Company has also not considered Minimum Alternate Tax
benefit of Rs. 2051.67 lakhs (including Rs. 1,765.11 lakhs upto March
31, 2011) as credit in the accounts.
(c) Note No .45 regarding the premature termination by a client, of a
part of the contract with consequential damages, which has been
challenged by the Company in the Hon'ble Supreme Court. The Company has
also lodged counter claims against the client for the losses suffered
due to delay on their part and feels that no further liability would
accrue to the Company because of the above termination. The matter
being sub-judice, we are unable to comment on the impact, if any, of
the aforesaid termination on the related contract value, contract cost
and unbilled revenue and its consequential impact on the profit for the
year and the reserves and surplus of the Company as at the Balance
Sheet date.
The audit report for the year ended March 31, 2011 was also modified
for the matters stated in paragraphs (a), (b) and
(c) above.
5. Further to our comments in the Annexure referred to above, we
report that :
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss
and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v) On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, except for the possible effects of our
observations stated in para 4 above, the said accounts give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India :
a. in the case of Balance Sheet, of the state of affairs of the
Company as at March 31, 2012,
b. in the case of Statement of Profit and Loss, of the profit of the
Company for the year ended on that date; and
c. in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: SPML INFRA LIMITED
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
fixed assets.
(b) Fixed Assets were physically verified by the management during the
year in accordance with a planned programme of verifying all the fixed
assets over a period of three years, which in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) According to the information and explanations given to us, the
Company is maintaining proper records of inventory and no material
discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loans to four parties covered in the
register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs.2,148.57
lakhs and the year end balances of loans granted to such parties was
Rs. 1,855.70 lakhs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and the terms and conditions for the
above loans are not prima facie prejudicial to the interest of the
Company.
(c) The above loans are stated to be repayable on demand. As informed,
the repayment of above loans, to the extent demanded by the Company,
has been received during the year and thus, there was no default on the
part of the borrowers. The payment of interest with respect to such
loans is stated to have been regular.
(d) In view of the above loans being repayable by the parties on
demand, there is no overdue amount of loans granted to such parties.
(e) The Company has taken loans from two parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 177.06 lakhs and the
year-end balances of the above loans taken from such parties were Rs.
12.51 lakhs.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(g) The above loans taken are stated to be re-payable by the Company on
demand. As informed, the repayment of above loans, to the extent
demanded by the lenders, was paid by the Company during the year and
thus, there has been no default on the part of the Company. The loans
taken are interest free.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956
that need to be entered into the register maintained under section
301 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding the value of Rupees Five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) As informed, the Company has not accepted any deposits from the
public within the purview of Sections 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and the rules framed
thereunder.
(vii)In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, in respect of its construction activities and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess
and other material statutory dues to the extent applicable, have not
been regularly deposited with the appropriate authorities and there
have been significant delays in a number of cases.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, investor education and
protection fund, income-tax, wealth-tax, sales tax, customs duty,
excise duty, employees' state insurance, cess and other material
statutory dues which were outstanding at the year end for a period of
more than six months from the date they became payable, are as follows
:
Name of
the Director Nature of
the dues Amount Period to Which
the
(Rs in
Lakhs
Period to which
Sale Tax
Act for various
States Works
Contract Tax 258.38 2008-09 to
2011-12
Finance Act,
1994 Service Tax 127.11 2011-12
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name Nature the
Dues Amount Period
to Which Forum
Where
Dispute
West Bengal Non-Production of
'C' Forms 105.10 2005-06 President,
Appellate &
Revision
Board,
Kolkata
CST Act 1956 CST 6(2) sales
determined as pre 991.62 2006-07 President,
Appellate &
Revision
conceived
sale and taxed
at full rates. Board,
Kolkata
CST purchases
from West Bengal
(WB) 293.97 2007-08 President,
Appellate
& Revision
for Sales outside
WB projects u/s 6(2) Board,
Kolkata
and taxed under
WCT
CST 6(2) sales
determined as pre 785.45 2008-09 Sr Joint
Commr, Comml
Taxes
conceived sale
and hence taxed
(south circle), Kolkata
at full rates.
West Bengal Disallowance of
Rajiv Gandhi
Grameen 137.72 2006-07 President,
Appellate &
Revision
VAT Act Vidyutikaran
Yojana (RGGVY)
Sales Board,
Kolkata
Levy of tax on
CST Sales to WB
Projects, 105.34 2007-08 President,
Appellate &
Revision
RGGVY Sales
Board, Kolkata
Local Sale and
RGGVY sales are
added 261.70 2008-09 Sr Joint
Commr, Comml
Taxes
to WCT and taxed
(south circle), Kolkata
MP General
Entry Tax 34.67 2004-05 Joint
Commissioner
(Appeal),
Sales Tax
Act Bhopal
Delhi
Sales Non-submission of
'C' Forms 17.04 1991-92, Deputy
Commissioner
Tax Act 1999-00, 1998-99 (Commercial
Tax)
Asst.
STO, Delhi
Kerala
VAT Act Tax demand on
advances received 71.34 2007-08 CTO - WC -
Ernakulam
Income Tax Income Tax demand
due to 2951.78 2004-05 to CIT
(Appeals),
Kolkata
Act, 1961 disallowance of
benefit u/s80A 2008-09
Central
Excise Penalty under
Rule 26 of the 2004-05 to CESTAT,
Mumbai
Act, 1944 Central Excise
Rules, 2002 52.64 2005-06
Finance Act, Service tax on
advance received 23.13 2005-06 toCommissioner
Service Tax,
1994 2006-07 Kolkata
(x) Without considering the consequential effects, if any, of the
matters stated in paras 4(a) to 4(c) of our audit report, whose impact,
if any, is presently unascertainable, the Company has no accumulated
losses at the end of the financial year and it has not incurred cash
losses in the current and immediately preceding financial year.
(xi) Based on our audit procedures and as per the information,
explanations and documents produced to us by the management, we are of
the opinion that the Company has not defaulted in repayment of dues to
banks. The Company has no outstanding dues from any financial
institution or debenture holders.
(xii) According to the information and explanations given by the
management and based on the documents and records produced to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from bank or
financial institutions, the terms and conditions whereof, in our
opinion, are not prima-facie prejudicial to the interest of the
Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
loans were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii)The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S. R. Batliboi & Co. For Sunil Kumar Gupta & Co.
Firm Registration No.301003E Firm Registration No.003645N
Chartered Accountants Chartered Accountants
Per R. K. Agrawal S. K. Gupta
Partner Partner
Membership No.16661 Membership No.82486
Place : Gurgaon Place : Gurgaon
Date : May 29, 2012 Date : May 29, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of SPML Infra Limited
(Formerly Subhash Projects & Marketing Limited) ('the Company') as at
March 31, 2011 and also the Profit and Loss Account and the Cash Flow
Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Attention is drawn to the following notes on Schedule 20B:
(a) Note No. 8 regarding accounting of share of loss amounting to Rs.
34,633 thousands from Joint Ventures on the basis of unaudited
financial statements as certified by the management. Further
adjustments, if any, on this account are presently not ascertainable.
(b) Note No.23 regarding non provision of tax liability of Rs. 690,764
thousands as on March 31, 2011 (including Rs. 561,400 thousands upto
March 31, 2010) arising on account of the amendment to Section 80IA of
the Income Tax Act, 1961 in the Finance Act, 2009. The Company has
filed a writ with the Hon'ble High Court at Calcutta which has been
admitted as well, challenging the validity of the above retrospective
amendment, which as per legal opinion obtained by the company, is ultra
vires to the main section of the above Act. Till the matter is decided
by the Hon'ble High Court, the liability, if any, in this regard is
unascertainable. We are unable to comment on the impact of the above
non-provision of tax on the Company's profit for the year and networth
at the year end.
Because of the above, Minimum Alternate Tax benefit of Rs. 176,511
thousands (including Rs. 141,622 thousands upto March 31, 2010) has not
been considered as credit in the accounts.
(c) Note No.24 regarding the premature termination by a client, of a
part of the contract with consequential damages, has been challenged by
the Company in the Hon'ble Supreme Court. The Company has also lodged
counter claims against the client for the losses suffered due to delay
on their part and feels that no further liability would accrue to the
Company because of the above termination. The matter being sub-judice,
we are unable to comment about its impact, if any, on the profit for
the year and the networth of the Company as at the Balance Sheet date.
The audit report for the year ended March 31, 2010 was also modified
for the matters stated in paragraphs (a) and (b) above.
5. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v) On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, subject to the impact of the matters in
paras 4 above, the said accounts give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India;
a. in the case of Balance Sheet, of the state of affairs of the
Company as at March 31, 2011,
b. in the case of Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
c. in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: SPML INFRA LIMITED (Formerly Subhash Projects and Marketing
Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed Assets were physically verified by the management during the
year in accordance with a planned programme of verifying all the fixed
assets over a period of three years, which in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) According to the information and explanations given to us, the
Company is maintaining proper records of inventory and no material
discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loans to four parties covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 225,803 thousands and
the year end balances of loans granted to such parties was Rs. 107,855
thousands.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and the terms and conditions for the
above loans are not prima facie prejudicial to the interest of the
Company.
(c) The above loans are stated to be repayable on demand. As informed,
the repayment of above loans, to the extent demanded by the Company,
has been received during the year and thus, there was no default on the
part of the borrowers. The payment of interest with respect to such
loans is stated to have been regular.
(d) In view of the above loans being repayable by the parties on
demand, there is no overdue amount of loans granted to such parties.
(e) The Company has taken loans from four companies covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 344,974 thousands and
the year- end balances of the above loans taken from such parties was
Rs. 99,483 thousands.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(g) The above loans taken are stated to be re-payable by the Company on
demand. As informed, the repayment of above loans, to the extent
demanded by the lenders, was paid by the Company during the year and
thus, there has been no default on the part of the Company. The payment
of interest with respect to such loans is stated to have been regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding the value of Rupees Five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the purview of Sections 58A and 58AA of the Companies Act, 1956 and the
rules framed thereunder.
(vii) The Company has an internal audit system, the scope and coverage
of which, in our opinion requires to be enlarged to make it
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, in respect of wind power and are of the opinion that prima
facie, the prescribed accounts and records have been made and
maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty and cess
to the extent applicable, have not been regularly deposited with the
appropriate authorities and there have been significant delays in
number of cases.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us,
undisputed dues in respect of income-tax, wealth- tax, sales tax,
customs duty, excise duty, employees' state insurance, cess and other
material statutory dues which were outstanding at the year end for a
period of more than six months from the date they became payable, are
as follows:
Name of the statute Nature of the dues Amount Period to which the
(Rs in
thousands) amount relates
Sale Tax Act for
various States Works Contract Tax 15,765 2008-09 to 2010-11
Employees ' State
Insurance Act, 1948 ESI Deduction 288 2010-11
Finance Act, 1994 Service Tax 5,633 2010-11
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Nature of The Dues Amount Period to
which Forum where
Dispute
the
Statute (Rs. in the amount is pending
thousands) relates
West Bengal Non-submission of
'C' Forms 10,510 2005-06 Deputy
Commissioner
Appeal
CST Act (Commercial
Taxes), Kolkata
Tax liability
determined at full 75,000 2006-07 Deputy
Commissioner
Appeal
rate pending
submission (Commercial
Taxes), Kolkata
of documents
West Bengal Tax liability
determined at full 1,58,950 2006-07 Sen. Joint
Commissioner of
Vat Act rate pending
submission Commercial Taxes
of documents
MP General Demand due to entry 3,467 2004-05 Joint Commissioner
(Appeal),
Sales Tax
Act tax liability Bhopal
Delhi Sales Non-submission of
'C' Forms 1,704 1991-92, Deputy
Commissioner
Tax Act 1999-00, (Commercial Tax)
1998-99 Asst. STO, Delhi
Kerala
VAT Act Demand on advances
received 7,134 2007-08 CTO Ã WC Ã
Ernakulam
Andhra
Pradesh Demand due to
differential rates 4,229 2008-09 Commercial Tax
(Appeal)
VAT Act
Income Tax Income Tax demand
due to 197,974 2007-08 CIT (Appeals)
Act, 1961 disallowance of
benefit u/s 80IA Poddar Court,
Kolkata
Central
Excise Penalty under Rule
26 of the 5,264 2004-05 to CESTAT, Mumbai
Act, 1944 Central Excise
Rules, 2002 2005-06
Finance
Act, Service tax on
advance received 2,313 2005-06 to Commissioner
1994 2006-07 Service Tax,
Kolkata
(x) Without considering the matters stated in paras 4(a) to 4(c) of our
audit report, whose impact, if any, is presently unascertainable, the
Company has no accumulated losses at the end of the financial year and
it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that, the
Company, during the year has defaulted in repayment of dues including
working capital facilities to certain banks to the extent of Rs.
1055,945 thousands (defaults being for a period of less than 90 days)
of which Rs. 1030,120 thousands was paid during the year and the
balance Rs 25,825 thousands although overdue as on 31st March 2011, has
since been fully paid. The Company has no outstanding dues from any
financial institution or debenture holders.
(xii) According to the information and explanations given by the
management and based on the documents and records produced to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from bank or
financial institutions, the terms and conditions whereof, in our
opinion, are not prima-facie prejudicial to the interest of the
Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
loans were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S. R. Batliboi & Company For Sunil Kumar Gupta & Co.
Firm Registration No.301003E Firm Registration No.003645N
Chartered Accountants Chartered Accountants
Per R. K. Agrawal Per S. K. Gupta
Partner Partner
Membership No.16667 Membership No.82486
Place : New Delhi Place : New Delhi
Date : May 30, 2011 Date : May 30, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of SPML Infra Limited
(Formerly Subhash Projects & Marketing Limited) (the Company) as at
March 31, 2010 and also the Profit and Loss Account and the cash flow
statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. (a) Attention is drawn to Note No. 26 on Schedule 20B regarding
non-provision of tax liability of Rs.561,400 thousands (including
Rs.183,900 thousands for the year) arising on account of the recent
amendment to Section 80IA of the Income Tax Act, 1961 in the Finance
Act, 2009. The Company has already filed a writ with the Honble High
Court at Calcutta which has been admitted as well, challenging the
validity of the above retrospective amendment which as per legal
opinion obtained, is ultra vires to the main section the above Act.
Till the matter is decided by the Honble High Court, the liability, if
any, in this regard is unascertainable. We are unable to comment on the
impact of the above non-provision of tax on the Companys profit for
the year and net worth at the year end.
(b) Attention is drawn to Note No 8. on Schedule 20B regarding
accounting of share of profit from joint ventures amounting to Rs.9,576
thousands on the basis of unaudited financial statements as certified
by the management. Adjustment, if any, on this account is presently not
ascertainable.
5. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v) On the basis of the written representations received from the
directors, as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, subject to the impact of the matters
given in para 4, the said accounts give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India;
a. in the case of Balance Sheet, of the state of affairs of the
Company as at March 31, 2010,
b. in the case of Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
c. in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our
report of even date) Re: SPML INFRA LIMITED (formerly Subhash Projects
and Marketing Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were noticed on such
verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year except for materials
lying with third parties, a major part of which has however, been
confirmed by the respective parties at the year end.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory and
no material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loan to three parties covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs.170,443 thousands and
the year end balances of loans granted to such parties was Rs. 150,284
thousands.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and the terms and conditions for the
above loans are not prima facie prejudicial to the interest of the
Company.
(c) The above loans are stated to be repayable on demand. As informed,
since the Company has not demanded repayment of the above loans during
the year, there has been no default on the part of parties to whom the
monies have been lent by the Company. The payment of interest with
respect to such loan has been generally regular.
(d) In view of the above loans being repayable by the parties on
demand, there is no overdue amount of loans granted to such parties.
(e) The Company has taken loan from four companies covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 383,710 thousands and
the year-end balance was Rs. 373,901 thousands.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(g) The above loans taken are stated to be re-payable by the Company on
demand. As informed, since the lenders have not demanded repayment of
the above loans during the year, there has been no default on the part
of the Company. The payment of interest with respect to such loans has
been generally regular.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased are of special nature and suitable alternative sources do not
exist for obtaining comparable quotations thereof, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business, for the purchase of inventory and fixed
assets and for the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal control
system in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding the value of Rupees Five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) As informed, the Company has not accepted any deposits from the
public during the year.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, in respect of wind power and are of the opinion that prima
facie, the prescribed accounts and records have been made and
maintained.
(ix) (a) Undisputed statutory dues of provident fund, investor
education and protection fund, employees state insurance, income-tax,
sales-tax, wealth- tax, service tax, customs duty, excise duty, cess,
etc. have generally been regularly deposited with the appropriate
authorities although there have been certain cases of delays in deposit
during the year. Further, since the Central Government has till date
not prescribed the amount of cess payable under section 441 A of the
Companies Act,1956, we are not in a position to comment upon the
regularity or otherwise of the company in depositing the same.
(b) According to the information and explanations given to us,
undisputed dues in respect of income-tax, wealth-tax, sales tax,
customs duty, excise duty, cess and other statutory dues which were
outstanding at the year end for a period of more than six months from
the date they became payable, are as follows:
Period to which the
Name of
the statute Nature of the dues Amount (Rs
in thousands) amount relates
Sale Tax Act
for various
States Sales Tax on sale
of goods 7,073 2003-04 to 2008-09
Works Contract Tax
deducted 7,381 2002-03 and 2006-07
while payment to
contractors to 2008-09
Income Tax
Act,1961 Tax Deducted at Source 255 2006-07
The Finance
Act, 1994 Service Tax on
construction 1,503 2009-10
contracts
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Amount
Name of the Statute Nature of The Dues (Rs. in thousands)
West Bengal CST Act Non-submission of C Forms 10,510
Tax liability determined
at full rate 75,000
pending submission of documents
West Bengal Vat Act Tax liability determined
at full rate 1,58,950
pending submission of documents
MP General Sales Tax Demand due to entry tax
liability 3,467
Act
Delhi Sales Tax Act Non-submission of C Forms 1,704
Kerala VAT Act Demand on advances received 7,134
Andhra Pradesh VAT Act Demand due to differential rates 4,229
Name of the Statue Period to which Forum where Dispute is
the amount relates pending
West Bengal CST Act 2005-06 Deputy Commissioner
(Commercial Taxes), Kolkata
West Bengal Vat Act 2006-07 Sen. Joint Commissioner of
Commercial Taxes
MP General Sales Tax
Act 2006-07 Sen. Joint Commissioner of
Commercial Taxes
Delhi Sales Tax Act 2004-05 Joint Commissioner (Appeal),
Bhopal
Kerala VAT Act 1991-92, Deputy Commissioner
1999-00, (Commercial Tax) Asst. STO,
1998-99 Delhi
Andhra Pradesh VAT Act 2007-08 CTO - WC - Ernakulam
2008-09 Commercial Tax (Appeal)
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that, the
Company during the year have defaulted in repayment of dues including
working capital facilities to certain banks to the extent of
Rs.3,959,484 thousands of which Rs.3,580,951 thousands was paid during
the year and the balance Rs.378,533 thousands was overdue as on 31st
March 2010 has since been fully paid. The Company has no outstanding
dues in respect of a financial institution or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from bank or
financial institutions, the terms and conditions whereof in our opinion
are not prima-facie prejudicial to the interest of the Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S.R. BATLIBOI & CO. For SUNIL KUMAR GUPTA & CO.
Firm Registration No.: 301003E Firm Registration No.: 003645N
Chartered Accountants Chartered Accountants
Per R.K.Agrawal S. K. Gupta
Partner Partner
Membership No.: 16667 Membership No.: 82486
Place: Kolkata Place: Kolkata
Date: May 29, 2010 Date: May 29, 2010
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