INDEPENDENT AUDITOR'S REPORT
To the Members of
Om Metals Infraprojects Limited
Report on the Financial Statement
1. We have audited the accompanying standalone financial statements of Om MetalsInfraprojects Limited ('the Company') which comprise the Balance Sheet as at 31 March.2017 the Statement of Profit and Loss the cash flow statement for the year then endedand a summary of significant accounting policies and other explanatory information inwhich are incorporated financial statements of Engineering Real estate packaging &Hotel Divisions of the Company audited by other auditors and whose reports have beenfurnished to us. Our opinion in so far as it relates to the affairs of such division isbased solely on the report of other auditors.
Management's Responsibility forthe Standalone Financial Statements
2. The Company's Board of Directors is responsible forthe 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 as applicable. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there underand the order under section 143(11) ofthe Act.
5. 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.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment 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. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
7. 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.
8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
a) in the case of balance sheet of the state of affairs of the Company as at 31stMarch 2017
b) inthecaseof thestatementofprofitandlossoftheprofit fortheyearendedonthatdate.
c) in the case of the cash flow statement of the case flowfor the year ended on thatdate.
9. Other matter(s)
(i) We did not audit the financial statements of Four unincorporated integrated jointventures/PF included in the standalone financial statements whose financial statementsreflect Company's net share in profit of Rs.360.64 Lacs for the year ended 31 March 2017.These financial statements have been audited by other auditors whose audit reports havebeen furnished to us by the management and our opinion on the standalone financialstatements of the Company for the year then ended to the extent they relate to thefinancial statements not audited by us as stated in this paragraph is based on solely onthe audit reports of the other auditors. Our opinion is not qualified in respect of thismatter.
(ii) We did not the audit the financial statements of company's overseas branch ofEngineering Division located at Nepal reflecting profit before tax of Rs. 200.53 Lacs forthe year ended 31 March 2017 which are incorporated in Engineering Division. Thesefinancial statements are audited by branch auditor and certified by the Company'smanagement as reported by the Branch Auditor of the Engineering Division. In our opinionon the standalone financial statements of the Company for the year then ended to theextent they relate to the financial statements as stated in this paragraph is based solelyon on such management certified financial statements. Our opinion is not qualified inrespect of this matter.
(iii) The Financial statements in connection with the trade receivables amounting toRs. 54.66 Lacs which are subject matters of arbitration proceedings/ negotiations with theproject authorities due to some disputes. The management of the company keeping in viewthe status and the outcome of arbitration proceedings and the basis of which steps torecover these amounts are currently in process is confident of recoveringthe aforesaiddues. Our report is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirement
10. As required by the companies (Auditor's Report) order 2016 ("the Order")issued by the Central Govt of India in terms of Section 143(11) of the Act we give inthe annexure "A" a statement on the matters specified in paragraphs 3 & 4 ofthe Order.
11. 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 and proper returnsadequate for the purposes of our audit have been received from the branches i.e.Engineering Real estate packaging & Hotel Divisions of the Company notvisited by us.
(c) The report(s) on the accounts of the branch office(s) i.e. Engineering Realestate packaging & Hotel Divisions of the Company audited under section 143 (8) ofthe Act by the branch auditors have been sent to us and have been properly dealt with byus in preparing this report.
(d) The standalone financial statements i.e. the balance sheet the statement of profitand loss and the cash flow statement dealt with by this report are in agreement with thebooks of accounts and with the returns received from the branches not visited by us.
(e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act as applicable.
(f) Under the other matter(s) described in paragraph 9 above in our opinion there isno adverse effect on the functioning of the company.
(g) On the basis of the written representations received from the directors as on 31stMarch 2017 and 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.
(h) With respect to the adequacy of the internal control over financial reporting ofthe company and the operating effectiveness of such controls. Refer to our separate reportin annexure 'B'. Our report expresses an unmodified opinion on the adequacy and operatingeffectiveness of the Company's internal financial controls over financial reporting inwhich reports of branch auditors have been sent to us and have been properly dealt with byus in the preparation of this report.
(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 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 litigation on its financial positionin its Financial Statement as referred in Note no 2.28(a) to the Financial Statement.
ii. The Company has made provisions as required under the applicable law or accountingstandards for material foreseeable losses if any on Long Term Contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.
iv. The Company has provided requisite disclosures in its standalone financialstatements dealings in Specified Bank Notes during the period from 8 November 2016 to 30December 2016 and these are in accordance with the books of accounts maintained by theCompany. Refer Note 2.47 to the standalone financial statements.
| ||For M. C. Bhandari & Co. |
|Place: Jaipur. ||FIRM REG. N0.303002E |
|Dated: 30-05-2017 ||Chartered Accountants |
| ||(CA S K Mahipal) |
| ||Partner |
| ||M.No. 070366 |
ANNEXURE A TO THE AUDITOR'S REPORT
Annexure referred to in paragraph 1 under the heading of "Report on other legaland Regulatory requirements" of
the independent Auditor's Report on the Financial Statements of Om Metals InfraprojectsLimited ("The
Company") for the year ended on 31st March 2017.
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of accounts and other recordsexamined by us in the normal course of audit. In preparing the report we have consideredthe report made under the aforesaid order by other auditors who have audited theFinancial Statements of the Divisions of Engg. Real estate Packaging and Hotel etc. ofthe Company we report that:
(i) In respect of fixed assets:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The fixed assets were physically verified during the year by the management inaccordance with a program of verification the frequency of verification is reasonablehaving regard to the size of the company and the nature of its fixed assets. According tothe information and explanations given to us no material discrepancies were noticed onsuch verification as compared to books records.
c. The title deeds of all the immovable properties are held in the name of the companyexcept for the below:
|Name of Property ||Located at ||Carrying Value ||Title Deed in the name of |
|Industrial Land & Building ||Plot No A-37-38 A -21-22 B-26 Industrial Estate Kota ||3.00 ||Om Metals & Mineral P Ltd* |
|Industrial Land & Building ||Plot No B-131 IPIA Kota ||Land-483.49 Building-34.65 ||Om Structural India P Ltd** |
|Industrial Land & Building ||Special -1 IPIA Kota ||Land - 2443.82 Building 282.83 ||Om Rajasthan Carbide Ltd** |
|Industrial Land & Building ||Special - 1A IPIA Kota ||Land -1876.18 Building-47.89 ||Jupitar Manufacturing P Ltd** |
|Commercial Building ||Cheera Bazar Mumbai ||16.50 ||Om Metals & Minerals Ltd* |
|Commercial Building ||NBCC Plaza IVth Floor Sector -11 Pushp Vihar Saket Delhi ||2100.00 ||Pending for registration |
*these are the earlier name of "the Company"
** immovable properties i.e.freehold/lease hold land and buildings are held in the nameof the Company and such immovable properties has been transferred pursuant to the schemeof amalgamation under section 391 to 394 of the Companies Act 1956 the transfer isthrough the order of the Hon'ble High Court Rajasthan Jaipur and are pendingforregistration in favor of the Company.
(ii) The management has conducted physical verification of inventory at reasonableintervals during the year.No material discrepancies were noticed on the physicalverification.
(iii) According to information and explanations given to us the company has during theyear granted interest free unsecured loan aggregating Rs. 1.74 Crores to Foursubsidiaries including two wholly owned subsidiaries and Seven joint ventures Rs. 23.68Crores covered in the register maintained under Companies Act 2013. At the year end theoutstanding balances of such loans granted to four subsidiaries including two wholly ownedsubsidiaries aggregating to Rs. 217.84 crore and seven joint ventures Rs.39.41 Croreswhich are Interest free and further explained to us these loans have been made forsetting up new
projects and make strategic Investments:
a) in our opinion the terms and conditions of grant of such loans are not prima facieprejudicial to the company's interest subject to the cost of funds to the Company whichare prejudicial to the interest of the Company as the company has granted interest freeloan.
b) The receipt of principal amount wherever stipulated is regular and where theschedules of repayment of principal is not stipulated hence we are unable to comment asto whether repayments are regular
c) In the absence of stipulated schedule of repayment of principal and payment ofinterest we are unable to comment as to whether there is any amount which is overdue formore than 90 days and whether reasonable steps have been taken by the Company for recoveryof the principal amount and interest.
(iv) According to information and explanation given to us and based on the legalopinion obtained by the company that the company being a company engaged in the businessof providing infrastructure facilities in terms of section 186 the company has compliedwith the provisions of section 185 and 186 of the Companies Act 2013 in respect of grantof loans making investments and providing guarantee and security as applicable.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) oftheOrderarenotapplicable.
(vi) We have broadly reviewed the books of accounts maintained by the company pursuantto the Rules made by the Central Govt. for the maintenance of cost records under subsection (1) of section 148 of the Companies Act in respect of Engineering Division whichincludes Road and Dam Construction of the company and are of the opinion thatprima-facia the prescribed accounts and records have been made and maintained. Howeverwe have not made a detailed examination of the cost records with a view to determiningwhetherthey are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax
service tax duty of customs duty of excise duty value added tax cess have not beenregularly deposited to the appropriate authorities there have been significant delay inlarge number of cases. Further no undisputed amounts payable in respect thereof wereoutstanding at the year-end for a period of more than six months from the date they becomepayable.
(b) According to the information and explanations given to us and the records of thecompany examined by us.
The dues outstanding in respect of income-tax sales-tax service tax duty of exciseand Wealth Tax on account of any dispute are as follows:
|Nature of the Statute ||Nature of Dues ||Forum where dispute is pending ||Demand Amount (Rs. in Lacs.) ||Amount paid under protest (Rs. in lacs.) ||Period to which the amount relates |
|Central Sales Tax Act 1956. and Sales Tax/VATActof ||Sales Tax & Entry Tax ||Commissioner (Appeals)/Tribunal ||457.01 ||1.97 ||1990-91 2009- 10 to 2011-12 |
|various states || ||High Court ||16.91 ||0.00 ||2003-04 |
|Central Excise Act 1944 ||Excise Duty ||Tribunal (CEGATE) ||471.46 ||0.00 ||2009-10 to 2011-12 |
| || ||Commissioner(App eal)and Show Case ||459.40 ||21.50 ||2000-01 to 2014-15 |
|Income Tax Act 1961 ||Income Tax ||ITAT ||554.64 ||160.22 ||2012- 13 & 2013- 14 |
| || ||CIT Appeal ||98.79 ||229.61 ||2007-08 to 2015-16 |
|Service tax law finance Act 1994 ||Service Tax ||Commissioner (Appeals)/Tribunal ||199.30 ||1.50 ||2003-04 to 2005-06 & 2009-10 to 2011-12 |
|Wealth Tax Act. ||Wealth Tax ||ITAT ||0.28 ||0.28 ||1992-1993 |
Note: 1) Amount as per demand orders including interest and penalty wherever mentionedin the order.
2) In the matter of the Income tax the department has disallowed claims under section80IB aggregating Rs. 10497.35 Lacs (previous year Rs. 8816.02 Lacs) during the FinancialYears 1976-771995-962001-02 to 2008-09.The appeals were decided in favor of the companyby the ITAT. The department has preferred appeals with the Hon'ble High Court. The taxliability if any arising on the a final outcome of the case is indeterminate hence couldnot be provided.
(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution or government during the year. The Company did not have anyoutstanding debentures during theyear.
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.
(x) No fraud by the Company or on the company by its officers or employees has beennoticed or reported during the period covered by our audit.
(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 of the Act read with Schedule V to theCompanies Act 2013.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly clause 3(xii) ofthe Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with section 177 and 188 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.
(xv) The company has not entered into any non-cash transactions with directors orpersons connected with them.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBankof India Act 1934.
| ||For M.C. BHANDARI & CO. |
| ||FIRM REG. N0.303002E |
|Placedaipur ||Chartered Accountants |
|Dated: 30.05.2017 || |
| ||(S.K. MAH 1 PAL) |
| ||PARTNER |
| ||M. NO.70366 |
Annexure to the Independent Auditor's Report of even date to the members of Om MetalInfraprojects Limited on the financial statements for the year ended 31stMarch 2017
INDEPENDENT AUDITOR'S REPORT
Independent Auditor's report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act"). Inpreparing the report we have considered the report made under the aforesaid order byother auditors who have audited the Financial Statements of the Divisions of Engg. RealestatePackaging and Hotel etc. of the Company we report that:
1. In conjunction with our audit of the standalone financial statements of Om MetalsInfraprojects Limited ("the Company") as of and for the year ended 31 March2017 we have audited the internal financial controls overfinancial reporting (IFCoFR) ofthe company of as of that date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control overfinancial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Control Over Financial Reporting (the'Guidance Note') issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of the company's business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required underthe Act.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR 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 andexpenditures of the company are being made only in accordance with authorisations ofmanagement 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
7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2017 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Control Over Financial Reporting (the 'Guidance Note') issued by the Instituteof Chartered Accountants of India (ICAI).
|PlaceJaipur ||For M.C. BHANDARI & CO. |
|Dated: 30.05.2017 ||FIRM REG. N0.303002E |
| ||Chartered Accountants |
| ||(S.K. MAH 1 PAL) |
| ||PARTNER |
| ||M. NO.70366 |