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IITL Projects Ltd.

BSE: 531968 Sector: Infrastructure
NSE: N.A. ISIN Code: INE786E01018
BSE LIVE 15:13 | 01 Dec 22.00 -0.95
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 22.00
PREVIOUS CLOSE 22.95
VOLUME 20
52-Week high 34.75
52-Week low 19.00
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.00
Sell Qty 30.00
OPEN 22.00
CLOSE 22.95
VOLUME 20
52-Week high 34.75
52-Week low 19.00
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.00
Sell Qty 30.00

IITL Projects Ltd. (IITLPROJ) - Auditors Report

Company auditors report

TO THE MEMBERS OF IITL PROJECTS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of IITL PROJECTSLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

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 Standardsprescribed under section 133 of the Act.

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 standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the

Company's preparation of the standalone financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes 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 standalone financial statements.

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

Basis for Qualified Opinion

As stated in Note 3.36 a Jointly controlled entity (the Firm) referred to therein hasnot provided for interest of ' 34798105/- for the year on one of its loanaccounts. As a result the Company's share of loss from the Firm and Other CurrentLiabilities are understated by ' 8134195/- and consequently the loss for the yearis understated and Reserves and Surplus as at the year end is overstated by an equivalentamount.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matter described in the Basis for QualifiedOpinion paragraph abovethe aforesaid standalone financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 and its loss and its cash flows for the year ended on thatdate.

Emphasis of Matter

We draw attention to the following matters in the Notes to the standalone financialstatements:

i. As stated in Note 3.32 due to Real Estate market condition low demand andconsequent delay a Jointly controlled entity ("the Firm") referred to thereinhas started refunding booking amount along with interest to the customers as per theirrequest. The Firm is in the process of evaluating alternative options for executing theproject within the overall framework of the lease agreement. Auditors of the Firm havedrawn attention to this matter in their report on the financial statements of the Firm asat and for the year ended 31st March 2017. The management of the Company at this stagebased on its assessment does not expect any erosion in the capital contribution in theFirm.

ii. As stated in Note 3.34 the financial statements have been prepared on a goingconcern basis although the networth of the Company is negative as on 31st March 2017since the company has through its joint ventures adequate unsold inventories which on saleis expected to generate profits based on interalia Management's estimate of sale priceand cost escalations. These conditions indicate the existence of a material uncertaintythat may cast significant doubt about the Company's ability to continue as a goingconcern.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit

we report to the extent applicable 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) Except for the effect of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.

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

d) Except for the effect of the matter described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid standalone financial statements comply withthe Accounting Standards prescribed under section 133 of the Act.

e) The matter described in Para (ii) under the Emphasis of Matters paragraph above inour 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 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses qualified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

i) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements; (Refer Note 3.24)

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the standalone financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the 8th November 2016 of the Ministry of Finance duringthe period from 8th November 2016 to 30th December 2016. Based on audit proceduresperformed and the representations provided to us by the management we report that thedisclosures are in accordance with the books of account maintained by the Company and asproduced to us by the Management. (Refer Note 3.33)

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Firm's Registration No. 117365W)

Uday M. Neogi

Partner

Mumbai : 29th May 2017 (Membership No. 30235)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 (h)under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of IITL Projects Limitedon the standalone financial statements for the year ended 31st March 2017)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of IITLProjects Limited ("the Company") as of 31st March 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols overfinancial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit ofinternal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted

accounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit amaterial weakness has been identified in the operating effectiveness of the Company'sinternal financial controls over financial reporting as at 31st March 2017 in respect ofnon-provision by the Company in respect of share of interest expense not recognised by thejointly controlled entity (the Firm) resulting in understatement of share of loss from theFirm.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has maintained in all material respects an adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India except for the effect of the material weakness described in Basisfor Qualified Opinion paragraph above on the achievement of the objectives of the controlcriteria the Company's internal financial controls over financial reporting wereoperating effectively as at 31st March 2017.

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the standalonefinancial statements of the Company for the year ended 31st March 2017 and the materialweakness affect our opinion on the said standalone financial statements of the Company.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 117365W)
Uday M. Neogi
Partner
Mumbai : 29th May 2017 (Membership No. 30235)

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of IITL Projects Limitedon the standalone financial statements for the year ended 31st March 2017)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) The Company does not have any immovable property of freehold or leasehold land andbuilding and hence reporting under clause (i) (c) of the Order is not applicable.

(ii) As explained to us the stock of units in completed project were physicallyverified during the year by the Management at reasonable intervals and no materialdiscrepancies were noticed on physical verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 186 of the Companies Act 2013 inrespect of investments made. The Company has not granted any loans or provided guaranteesand security under Sections 185 and 186 of the Companies Act 2013.

(v) According to the information and explanations given to us the Company has notaccepted any deposit and the provisions of Sections 73 to 76 of the Companies Act 2013are not applicable and hence reporting under clause (v) of the Order is also notapplicable.

(vi) The maintenance of Cost records has not been specified by the Central Governmentunder section 148 (1) of the Companies Act 2013 accordingly reporting under clause (vi)of the Order is not applicable.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Income-tax Service Tax Value Added Tax cess and othermaterial statutory dues applicable to it to the appropriate authorities. Dues relating toEmployees' State Insurance Sales Tax Customs Duty and Excise Duty are not applicable tothe Company for the year.

(b) There were no undisputed amounts payable in respect of Provident Fund Income-taxService Tax Value Added Tax cess and other material statutory dues in arrears as at 31stMarch 2017 for a period of more than six months from the date they became payable.

(c) There are no dues of Income-tax Service Tax and Value Added Tax which have notbeen deposited as on 31st March 2017 on account of disputes.

(viii) The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause (viii)of the Order is not applicable to the Company.

(ix) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) or term loans and hence reporting under clause(ix) of the Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 117365W)
Uday M. Neogi
Partner
Mumbai : 29th May 2017 (Membership No. 30235)