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Sadbhav Infrastructure Projects Ltd.

BSE: 539346 Sector: Infrastructure
NSE: SADBHIN ISIN Code: INE764L01010
BSE LIVE 15:40 | 21 Aug 100.55 -1.45
(-1.42%)
OPEN

102.00

HIGH

104.00

LOW

100.00

NSE 15:31 | 21 Aug 102.75 1.20
(1.18%)
OPEN

101.05

HIGH

103.90

LOW

100.35

OPEN 102.00
PREVIOUS CLOSE 102.00
VOLUME 1190
52-Week high 120.40
52-Week low 81.05
P/E 93.10
Mkt Cap.(Rs cr) 3,542
Buy Price 101.50
Buy Qty 250.00
Sell Price 0.00
Sell Qty 0.00
OPEN 102.00
CLOSE 102.00
VOLUME 1190
52-Week high 120.40
52-Week low 81.05
P/E 93.10
Mkt Cap.(Rs cr) 3,542
Buy Price 101.50
Buy Qty 250.00
Sell Price 0.00
Sell Qty 0.00

Sadbhav Infrastructure Projects Ltd. (SADBHIN) - Auditors Report

Company auditors report

To

the Members of Sadbhav Infrastructure Project Limited Report on the FinancialStatements

We have audited the accompanying standalone financial statements of SadbhavInfrastructure Project Limited ("the Company") which comprises the BalanceSheet as at March 31 2016 the Statement of Profit and Loss and Cash Flow Statement forthe year then ended and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the 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 withaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial 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. 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 issued by the Institute of CharteredAccountants of India as specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 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. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2016 its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the Order.

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 purpose 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 Statement of Profit and Loss and Cash Flow Statement dealt withby 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 received from the directors as on March 312016 and taken on record by the Board

of Directors none of the directors is disqualified as on March 31 2016 from beingappointed as a director in terms of section 164 (2) of the Act;

(f) 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 dated April 23 2016 in "Annexure 2" to this report.

(g) 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 30 (I) to the financial statements;

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.

For S R B C & CO LLP For Manubhai & Shah LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration Number : 324982E ICAI Firm Registration Number : 106041W
Arpit K. Patel K. C. Patel
Per Partner Per Partner
Membership Number : 34032 Membership Number : 30083
Place of Signature : Ahmedabad Place of Signature : Ahmedabad
Date : April 23 2016 Date : April 23 2016

Annexure-1 referred to in Paragraph 1 of Report on Other Legal and RegulatoryRequirements of our report of even date of Sadbhav Infrastructure Project Limited for theyear ended March 31 2016.

(i) a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies were noticed on such verification;

c) As per the Company's records there are no immovable properties held by the company.Accordingly the provisions of clause 3(i)(c) of the Order are not applicable to theCompany and hence not commented upon.

(ii) The management has conducted physical verification of inventories in the natureof project inventory during the year and no material discrepancies were noticed on suchphysical verification.

(iii) a) The Company has granted loan to twelve Companies covered in the registermaintained under section 189 of the Companies

Act 2013 including interest free subordinate debt of Rs 16052.55 million of thenature of Project Sponsor Contribution as per Sponsor Support and Equity ContributionAgreement entered with the lenders of each special purpose entities as per serviceconcession arrangement of each project. In our opinion and according to the informationand explanations given to us the terms and conditions of the loans are not prejudicial tothe Company's interest.

b) The loans granted by the Company includes loans of Rs 2435.40 million re-payable ondemand to companies covered in the register maintained under section 189 of the CompaniesAct 2013. The loans granted which are subordinate debts in the nature of Sponsorcontribution are recoverable on achievement of certain financial performance of respectiveinvestee entities. We are informed that the company has not demanded repayment of any suchloan during the year and thus there has been no default on the part of the parties towhom the money has been lent. The payment of interest has been regular except for certainloan transaction aggregating of Rs 1111.75 million granted by the Company to a subsidiarycompany where payment of interest has not been specified.

c) There is no overdue amount of loans granted to companies firms or other partieslisted in the register maintained under section 189 of the Companies Act 2013 which areoutstanding for more than ninety days except interest of Rs 102.74 million on demand loanwhich is overdue for more than ninety days from a company covered in the registermaintained under section 189 of the Act and in our opinion at the year end reasonablesteps have been taken by the Company for recovery of the interest.

(iv) In our opinion and according to the information and explanations given to us andbased on legal opinion taken by the Company on applicability of section 185 of CompaniesAct 2013 in respect of loans to subsidiary entities in the nature of interest freesubordinate debt as a project sponsor contribution in which directors are interested andin respect of interest bearing other loans given in the ordinary course of the businessthe Company has complied with the provisions of section 185 of the Companies Act 2013.Further based on the information and explanations given to us being an InfrastructureCompany provision of section 186 is not applicable to the Company and hence not commentedupon.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to road and other infrastructureprojects related services and are of the opinion that prima facie the specified accountsand records have been made and maintained. We have not however made a detailedexamination of the same.

(vii) a) Undisputed statutory dues including provident fund income-tax sales-taxservice tax value added tax and other material

statutory dues have generally been regularly deposited with the appropriateauthorities. According to the information and explanation given to us there are no duespayable on account of Employee's State Insurance customs duty excise duty wealth taxand cess during the year.

b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income-tax service tax sales-tax value added taxand other material statutory dues were outstanding at the year end for a period of morethan six months from the date they became payable.

c) According to the records of the Company the dues outstanding of service tax onaccount of any dispute are as follows:

Name of the statute Nature f dues Amount (Rs in million Period to which the amount relates Forum where dispute is pending
The Finance Act 1994 Service Tax 40.98 FY 2009-10 and FY 2010-11 CESTAT Ahmedabad

(viii) In our opinion and according to information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto banks and debenture holders. The Company does not have any outstanding dues tofinancial institutions and government during the year.

(ix) According to the information and explanations given by the management and on anoverall examination of the balance sheet we report that monies raised by way of initialpublic offer / term loans were applied for the purpose for which the loans were obtainedthough funds which were not required for immediate utilization have been gainfullyinvested in fixed deposits. The maximum amount of such unutilized funds invested duringthe year was Rs 850 million of which Rs Nil was outstanding at the end of the year.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud on or by the officers and employees ofthe Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management we reportthat the managerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirement under clause 3(xiv) are not applicable to thecompany and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim.

(xvi) According to the information and explanations given to us the company is notrequired to be registered under section 45IA of Reserve Bank of India Act 1934. Howeverbased on financial statements for the year ended March 31 2016 the Company meets theregistration requirements under section 45-IA of the Reserve Bank of India Act 1934.Accordingly based on these financial statements the Company propose to apply for theregistration with the Reserve Bank of India.

For S R B C & CO LLP For Manubhai & Shah LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration Number : 324982E ICAI Firm Registration Number : 106041W
Arpit K. Patel K. C. Patel
Per Partner Per Partner
Membership Number : 34032 Membership Number : 30083
Place of Signature : Ahmedabad Place of Signature : Ahmedabad
Date : April 23 2016 Date : April 23 2016

Annexure-2 to The Independent Auditor's Report of even date on the Standalone FinancialStatements of Sadbhav Infrastructure Project Limited.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") To the Members of SadbhavInfrastructure Project Limited

We have audited the internal financial controls over financial reporting of SadbhavInfrastructure Project Limited ("the Company") as of March 31 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

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 the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

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 on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 judgment 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 internal financial controls system overfinancial 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 andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's 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 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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal

control over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S R B C & CO LLP For Manubhai & Shah LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration Number : 324982E ICAI Firm Registration Number : 106041W
Arpit K. Patel K. C. Patel
Per Partner Per Partner
Membership Number : 34032 Membership Number : 30083
Place of Signature : Ahmedabad Place of Signature : Ahmedabad
Date : April 23 2016 Date : April 23 2016