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DFL Infrastructure Finance Ltd.

BSE: 511393 Sector: Financials
NSE: N.A. ISIN Code: INE071C01019
BSE LIVE 12:40 | 27 Mar Stock Is Not Traded.
NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 0.72
PREVIOUS CLOSE 0.72
VOLUME 2499
52-Week high 0.73
52-Week low 0.67
P/E
Mkt Cap.(Rs cr) 0
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.72
Sell Qty 501.00
OPEN 0.72
CLOSE 0.72
VOLUME 2499
52-Week high 0.73
52-Week low 0.67
P/E
Mkt Cap.(Rs cr) 0
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.72
Sell Qty 501.00

DFL Infrastructure Finance Ltd. (DFLINFRA) - Auditors Report

Company auditors report

TO THE MEMBERS OF DFL INFRASTRUCTURE FINANCE LIMITED

Report on the Financial Statements

We have audited the accompanying standalone financial statements of M/s. DFLINFRASTRUCTURE FINANCE LIMITED ("the Company") which comprise the BalanceSheet as at 31st March 2015 the Statement of Profit and Loss the Cash Flow Statementfor the year then ended and a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance 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 theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the company has in place an adequate internal financial control systemover financial reporting and operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Basis for Qualified Opinion

The debit balances under receivables and debtors' accounts and the credit balances areas per books of accounts subject to confirmation from the parties.

Qualified Opinion

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 standalone 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 31stMarch 2015 and its profit and its cash flows for theyear ended on that date.

Emphasis of Matter

Attention of the share holders is invited to the following:

a. The loans taken from some banks became NPA. The CDR Package and the CDR ReworkPackage were withdrawn by the CDR Empowered Group. In the meanwhile the Company hasapproached the bankers for One Time Settlement Scheme for settlement of Loans and some ofthe banks have approved the same.

The OTS Scheme offered by some of the Banks is pending implementation and settlement.These conditions indicate the existence of material uncertainty that may cast asignificant doubt about the Company's ability to continue as a Going Concern. (ReferNote 1 7 & 8 of Schedule 18)

b. The Company's net owned funds is below Rs. 25 lakhs the limit prescribed by ReserveBank of India under section 45 - IA of the Reserve Bank of India Act 1934. This couldattract penal provisions under section 45 - MC of the Act

c. The Reserve Bank of India has issued certain prohibitory directions (Refer Note2 & 3 of Schedule 18) under Section 45JA and Section 45L of Reserve Bank of IndiaAct 1934. These conditions along with those stated in Note 1 7 & 8 of Schedule 18indicate the existence of material uncertainty that may cast a significant doubt about theCompany's ability to continue as a Going Concern. d. The Company has entered into anamendment agreement with Asia Pragati Capfin Pvt. Ltd. (Preference Share Holder) on 27thMarch 2012 for redemption of preference shares of Rs.10 @ Rs. 8.54 per share.

The gain on redemption amounting to Rs.325 lakhs has not been accounted for as the samewould be accounted at the time of redemption during the years 2017 2018 & 2019.(Refer Note No. 6 of Schedule 18)

e. The shareholders have not approved the re-appointment and increase in remunerationof the erstwhile Managing Director and the amount is included in Loans and Advances. Weare unable to express an opinion on the recoverability of the amount. (Refer Note No.12 of Schedule 18)

f. The remuneration of Whole Time Director for FY 2013-14 fixed by the Board ofDirectors was not fully approved by the Central Government Ministry of Corporate Affairsvide its order dated 06th August 2014. The company is in the process of filing a petitionfor waiver of the excess amounts paid (Refer Note No. 14 of Schedule 18).

g. In the absence of profits the Company could not declare dividend on the 4% and 9%Redeemable Preference Shares for the financial year 2014 -15 and hence it is not chargedto the Statement of Profit and Loss. (Refer Note No. 19 of Schedule 18).

h. The company has not appointed internal auditor for the audit of books of accountsfor the FY 2014 - 15.

(Refer Note No. 4 of Schedule 18)

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 2015 ('the Order') issued bythe Central Government of India in terms of sub-section (11) of Section 143 of the Act wegive in Annexure a statement on the matters specified in the paragraph 3 and 4 of theOrder to the extent applicable.

2. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. (e) On the basis of written representations receivedfrom the directors as on March 31 2015 and taken on record by the Board of Directorsnone of the directors is disqualified as on March 31 2015 from being appointed as adirector in terms of Section 164 of the Act.

(f) With respect to the other matters to be included in the Auditor's 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 financialposition in its financial statements - Refer Note 19 & 20 of Schedule 18 to thefinancial statements;

ii. The company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For P.B.VIJAYARAGHAVAN AND CO.
Chartered Accountants
Firm Registration No.: 004721S
K. RAJAGOPALAN
Place : Chennai Partner
Date : 30.05.2015 Membership No.: 14523

ANNEXURE TO THE AUDITORS’ REPORT

I. FIXED ASSETS:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

(b) As per the information and explanation given to us all the fixed assets have beenphysically verified by the management at regular intervals which in our opinion isreasonable having regard to the size of the Company and the nature of the assets. Nomaterial discrepancies were noticed on such verification

II. As the Company is a Non Banking Finance Company the provisions of sub clause(ii) a b and c of the Companies (Auditor's Report) Order 2015 are not applicable.

III. TRANSACTIONS WITH PERSONS COVERED BY REGISTER MAINTAINED U/S 189 OF

THE COMPANIES ACT 2013:

a) The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the companies Act2013.

IV. INTERNAL CONTROL :

In our opinion and according to the information and explanations given to us there areadequate internal control procedures commensurate with the size of the company and thenature of its business with regard to purchases of fixed assets and with regard to thesale of services. During the course of our audit we have not observed any continuingfailure to correct major weaknesses in internal controls in other areas.

V. PUBLIC DEPOSITS :

In our opinion and according to the information and explanations given to us thecompany has not accepted deposits from public and hence the provisions of sections 73 to76 or any other provisions of the Companies Act and the rules made there under are notapplicable to the company.

VI. COST ACCOUNTING RECORDS :

The Central Government has not prescribed maintenance of cost records under Section 148(1) of the Companies Act 2013.

VII. STATUTORY DUES :

(a) The company has generally been regular in depositing Provident Fund dues of itsemployees.

Based on information and explanation given to us no undisputed amounts payable inrespect of Income Tax Sales Tax Wealth Tax Service Tax Customs Duty Excise DutyValue Added Tax Cess and any other statutory dues were outstanding as at 31st March 2015for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Customs duty Wealth Tax Excise Duty Value Added Tax and Cesswhich have not been deposited on account of any dispute except as reported below:

Forum before which it is pending Assessment Year Tax due amount (In Lakhs) Forum before which it is pending
1995-96 To 1999-2000 246.16 CIT (A)
2001-02 294.03 CIT (A)
2002-03 56.35 ITAT Chennai
2003-04 13.91 ITAT Chennai
Income Tax Act 1961 2004-05 8.34 ITAT Chennai
2005-06 4.44 CIT (A)
2007-08 58.17 CIT (A)
2008-09 482.15 CIT (A)
2011-12 581.28 CIT (A)

(c) The company has generally been regular in transfer of amounts required to betransferred to Investor Education and Protection Fund in accordance with relevantprovisions of Companies Act 2013.

VIII. ACCUMULATED LOSSES :

The accumulated losses of the Company at the end of the financial year are not lessthan fifty percent of its net worth. The Company has incurred cash losses in the financialyear and in the immediately preceding financial year also.

IX. The loans taken from some banks became NPA. The repayment has to commence from01.04.2012.

The Company has gone for rescheduling the repayment of the term loans. The CDR Packageand the CDR Rework Package were withdrawn by the CDR Empowered Group. The Company hassubmitted proposals for One Time Settlement and the same is being taken up by the Banks.Also the One Time Settlement Scheme has been approved by 3 out of 12 participating banksand one another bank not forming part of CDR. Pending repayment of amounts acceptedthrough OTS Scheme the Company has not complied with Terms of OTS Scheme. (Refer Note 6 8& 9 of Schedule 18)

X. The company has not given any guarantee for loans taken by others from banks orfinancial institutions based on the records produced to us.

XI. In our opinion the term loans have been applied for the purpose for which theywere obtained.

XII. FRAUDS :

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 P.B.VIJAYARAGHAVAN AND CO.
Chartered Accountants
Firm Registration No.: 004721S
K. RAJAGOPALAN
Place : Chennai Partner
Date : 30.05.2015 Membership No.: 14523