To the Members of
B NANJI ENTERPRISES LTD.
Report on the Financial Statement
We have audited the accompanying stand alone financial statements of B NanjiEnterprises Limited Ahmedabad which comprise the balance sheet as at March 31 2015and the statement of profit & loss and cash flow statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the financial statements
Management is responsible for preparation of these financial statements that give atrue and fair review of the financial position financial performance and cash flows of thecompany in accordance with the accounting principles generally accepted in Indiaincluding Accounting Standards referred to in sec. 133 of the Companies Act 2013"the Act") read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility includes the design implementation and maintenance of internal controlsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the Auditing and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and Rules made there under.
We conducted our auditing accordance with the Standards on Auditing specifiedu/s.143(10) of the Act. These standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgement including the assessment of the risk of material misstatement ofthe financial statements whether due to fraud or error in making those risk assessmentsthe auditor considers internal control relevant to the Companys preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion onwhether the company has in place an adequate internal financial control system overfinancial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and reasonableness ofthe accounting estimates made by management as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
BASIS FOR QUALIFIED OPINION
Attention is invited to Note No. 1 regarding of valuation of work-in -progress atVevji Umargaon site at Direct Cost Plus Borrowing Cost for which no direct nexus fordeployment of fund borrowed is established which is not in conformity with therequirement of accounting standards i.e. AS-2 AS-7 and AS-16 issued by the Institute ofChartered Accounts of India. Had the company not included the borrowing cost in valuationof stock the profit for the year would have been lower by Rs.427.48 lacs and value ofcurrent assets would be lower by Rs.427.48 lacs
Attention is invited to Note No. 2 regarding of Sales of Flats/Apartments of AkanshaFlats scheme at Vevji Umargam Dist. Thane Maharashtra sales is accounted at the timeof giving possession to the purchasers. However in view of the provisions of MaharashtraOwnership of Flats Act 1963 company has to form either co. op. Society or a Company andexecute sale deed in favour of society/ company. Company has booked sales in the books ofaccounts on giving possession to the buyers of the flats. Company has not recovered thecontribution from the members for the proposed society as stipulated in the Agreement forSale.
Attention is invited to Note No. 3 advance payment of Rs.300.00 lacs against anagreement of Rs.486.00 lacs with related party during the year under review without priorapproval of members by way of a special resolution.
Attention is invited to Note No. 4 regarding Rs. 220.55 lacs received as advance forland in earlier years which is not considered as Deposit within the meaning of Sec. 73 ofthe Act read together with Rule 2 (12)(d).
Attention is invited to Note No. 5 regarding No Provision for Bad and Doubtful Interestfree loans of Rs.69.07 lacs given in earlier years.
Attention is invited to Note No. 8 regarding non provision of Leave Encashment which isnot in conformity with Accounting Standard AS-15 issued by the Institute of CharteredAccountants of India.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid stand alone financial statements give theinformation required by the act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the company as at 31st March 2015 and its Profit and its cashflow for the year ended on that date.
Report on other legal and regulatory requirement.
1. As required by the Companies ( Auditors Report) Order 2015 ( "theOrder" issued by the Central Government of India in the terms of sub sec.(11)of section 143 of the Companies Act 2013 we give in the Annexure a statement on thematters specified in paragraphs 3 & 4 of the Order to the extent applicable.
2. As required by sec. 143(3) of the Companies Act 2013 we report that :
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.
(b) Except for the effect of the matter described in sub para-1 of the Basis OfQualified Opinion paragraph in our opinion proper books of account as required by lawhave been kept by the Company so fat as appears from our examination of those books.
(c) The balance sheet Statement of Profit & Loss and Cash Flow Statement dealtwith by this report are in agreement with the books of accounts.
(d) Except for the effect of the matter described in sub para 1 to 8 ofthe Basis of Qualified Opinion paragraph above In our opinion the aforesaidfinancial statements comply with the Accounting Standards specified under section 133 ofthe Act read with rule 7 of the Companies (Accounts) Rules 2014.
(e) On the basis of written representation received from the directors as on March 312015 and taken on record by the Board of Directors none of the directors disqualified ason March 31 2015 from being appointed as a director in terms of Section 164(2) of theAct.
(f) With respect to the other matters to be included in the auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialstatements.
ii. The company has made provisions as required under the applicable laws foraccounting standards for material foreseeable losses on long term contracts
iii. There were no amount which are required to be transferred to the InvestorEducation and Protection Fund by the Company.
| ||FOR ATUL DALAL & CO. |
| ||CHARTERED ACCOUNTANTS |
| ||FIRM REG. NO. 100760W |
|AHMEDABAD ||ATUL J. DALAL |
|MAY 15 2015 ||PROPRIETOR |
| ||MEM. NO. 14665 |
1. (a) The company has updated fixed assets register to show full particulars includingquantitative details and situation of its fixed assets and reconciling the same withgeneral ledger.
(b) According to the information and explanations given to us all the assets have beenphysically verified by management at the end of the year which in our opinion isreasonable having regard to the size and nature of its business. We have been informedthat no material discrepancies were noticed on such verification.
2. (a) The inventory includes Land including Banakhat rights in Land CompletedBuilding Construction work in progress and development material. Physical verification ofthese inventories have been conducted at the year end by the management. The frequency ofsuch verification is required to be Strengthen.
(b) Company has given contract for construction work including labour and material andhence no stock of materials is required to be maintained. Regarding other materials thesame is treated as directly consumed as and when purchased. Hence the company is notrequired to maintain any stock records and its question of its physical verification doesnot arise.
3. In our opinion and according to the information and explanations given to us thereis adequate internal control procedure commensurate with the size of the company andnature of its business regard to awarding contracts purchases of materials fixed assets.sale of goods and services. During the course of our audit we have not observedcontinuing failure to correct major weaknesses in internal controls.
4. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits within the meaning of Section 73 to 76 of theCompanies Act 2013 and rules framed there under. However amount received as advancefor sale of Land or contribution from members is not considered as Deposits within themeaning of Section 73 of the Companies Act 2013 read with Rule 2(XII)(d).
5. We have been informed by the management no cost audit records has been prescribedunder section148(1) of the Companies Act 2013 in respect of products of the company.
6. Company is not depositing Provident Fund Dues with appropriate authorities intime. Provident Fund Dues (Both employees and employers Contribution arestill payable for the period from Sept.14 to March 15) According to theinformation and explanations given to us no undisputed amount payable in respect ofIncome Tax Wealth Tax Value Added Tax Excise Duty Custom Duty Service Tax
Sales Tax and other statutory dues applicable to company were in arrears as at31/03/2015 for a period of more than six months from the date become payable.
7. In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of dues to a financial institution.
8. In our opinion the company has given guarantee to a The Vijay CoOperative BankLtd. Tata Capital Financial Services Ltd. for advances taken by a firm M/s. B Nanji inwhich Company is a partner.
9. The loans have been applied for the purpose for which they were raised.
10. According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the course of our audit.
| ||FOR ATUL DALAL & CO. |
| ||CHARTERED ACCOUNTANTS |
| ||(Firm Reg. No.100760W) |
|AHMEDABAD ||ATUL J. DALAL |
|MAY 15 2015 ||PROPRITER |
| ||MEM. NO.14665 |