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Shree Ram Urban Infrastructure Ltd.

BSE: 503205 Sector: Infrastructure
NSE: N.A. ISIN Code: INE164H01011
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VOLUME 1326
52-Week high 81.35
52-Week low 47.50
P/E
Mkt Cap.(Rs cr) 206
Buy Price 49.60
Buy Qty 31.00
Sell Price 50.00
Sell Qty 1.00
OPEN 50.00
CLOSE 49.80
VOLUME 1326
52-Week high 81.35
52-Week low 47.50
P/E
Mkt Cap.(Rs cr) 206
Buy Price 49.60
Buy Qty 31.00
Sell Price 50.00
Sell Qty 1.00

Shree Ram Urban Infrastructure Ltd. (SHREERAMURBAN) - Auditors Report

Company auditors report

TO

THE MEMBERS OF SHREE RAM URBAN INFRASTRUCTURE LIMITED Report on the StandaloneFinancial Statements

We have audited the accompanying standalone financial statements of SHREE RAM URBANINFRASTRUCTURE LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2017 the Statement of Profit and Loss and 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 Statement

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act2013 ("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 judgements and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditors' 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 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 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

We refer to:

I. Note No. 43 to the standalone financial statements the Company received an order onfire refuge area passed by the Municipal Corporation of Greater Mumbai (MCGM)dt.31.08.2016 against which NGO Janhit Manch has filed Public Interest Litigation (PIL)in the Hon'ble Bombay High Court and the court has restrained the Municipal Commissionerfrom acting on the fire refuge order. Further the MCGM has passed an order onregularisation of the Public Parking Lot fixing premium/regularisation charges. TheCompany's SLP is also pending before the Apex Court against the order of Hon'ble BombayHigh court dt.27-01-2016. Consequently till the outcome of the judgement from Apex Courtwe are unable to comment upon the financial impact of the same on the financial statementsover and above the premium/ regularisation charges confirmed by MCGM.

II. Note No.46 to the standalone financial statements regarding non provision ofinterest under subvention scheme amounting to Rs.734822190/- as the Company is innegotiation with the fund provider for waiver/reduction of interest and does notanticipate subvention interest liability. Had the subvention interest provided the Lossfor the current year would have been higher by Rs.295984153/- Construction Work inProgress would have been higher by Rs. 438838037/- and the Current Liabilities wouldhave been higher by Rs.73.4822190/- and Reserves and Surplus would have been lower byRs.295984153/-.

III. Note No.49 to the financial statements the outstanding balances of loans andadvances and trade payables amounting to Rs.135638289/- (P.Y. Rs.177332033/-) andRs.242872164/- (P.Y.Rs.390850730/-) respectively are subject to confirmation andreconciliation. The consequential adjustments if any arising out of these are notquantifiable.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph 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 March 312017 and its loss and cash flows for the year endedon that date

Emphasis of Matter

We draw attention to:

1. Note No. 44 to the standalone financial statements inventory includes ImportedMaterials for the Construction Project of the Company amounting to Rs. 157711.694 /- islying in Custom Warehouse since 2013 however the Company has confirmed that the qualityof the material is unaffected and hence no provision is required to be made.

2. Note No. 45 to the standalone financial statements in respect of pending winding uppetitions against the company and the matters being subjudice the company is takingnecessary steps for settlement.

3. Note No. 47 to the standalone financial statements regarding modification in rateof interest on Debenture from 20.20% p.a. to 0.01 % p.a. during the year accordingly theCompany has provided interest at the said modified rate. If the original rate of interesthad been continued the provision towards interest on debenture would have been higherbyRs.433304.021/-

Our opinion is not qualified in respect of the matters stated above.

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 section 143 (11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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

a) We have sought and except for the possible effects of the matters described under"Basis for qualified opinion" paragraph have obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposeof our audit;

b) Except for the possible effects of the matter described in the "Basis forqualified opinion" paragraph in our opinion proper books of account as required bylaw have been kept by the Company so far as 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 except for the possible effects of the matter described in the"Basis for qualified opinion" paragraph the aforesaid standalone financialstatements comply with the Accounting Standards specified under section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of written representations received from the directors as on March312017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 312017 from being appointed as a directorin terms of section164(2)oftheAct.

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 in "Annexure B" and

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 explanation given to us:

i) The Company has disclosed the impact of pending litigation on its financial positionin its financial statements- Refer Note 20 to the standalone 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 required to be transferred to the Investors Educationand Protection Fund by the Company.

iv) The Company has provided requisite disclosures in its standalone financialstatements as regards its holdings as well as dealings in Specified Bank Notes as definedin the Notification S O. 3407(E) dated the Novembers 2016 of the Ministry of Financeduring the period from Novembers 2016 to December 30 2016. Based on the 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 37 to the standalone financial statements.

For HABIB & Co.

Chartered Accountants Firm Registration No. 103479W

(D. P. SHROFF)

Partner

Membership No. 045417

Place : Mumbai Date : 27*' May 2017

ANNEXURE-ATOTHEINDEPENDENT AUDITORS'REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our

report of even date)

i) I n respect of its fixed assets;

a) The Company has maintained proper records showing particulars including quantitativedetails and situation of fixed assets.

b) The fixed assets were physically verified during the year by the Management inaccordance with a programme of verification which in our opinion provides for physicalverification of ail fixed assets at reasonable intervals. No material discrepancies werenoticed on such verification.

c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

ii) As explained to us the inventory has been physically verified during the yearother than inventory lying at Customs. In our opinion the frequency of verification isreasonable. No material discrepancies were noticed on physical verification.

iii) The Company has granted unsecured loans to three bodies corporate listed in theregister maintained under Section 189oftheCompaniesAct 2013. ('the Act').

a) In our opinion and according to the information and explanation given to us theother terms and conditions for such interest free loans were not prima facie prejudicialto the interest of the Company.

b) In absence of any stipulations the regularity of receipts of principal amount isnot commented upon.

c) There are no overdue amounts in respect of the loan granted to the bodies corporatelisted in the register maintained under section 189 of the Act.

iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act to the extentapplicable.

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

vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by Central Government of India regarding the maintenance of cost recordsunder subsection (1) of Section 148 of the Companies Act 2013 and are of the opinion thatprima facie the prescribed accounts and records have been maintained. We have howevernot made a detailed examination of the records with a view to determine whether they areaccurate or complete.

vii) In respectofstatutorydues:

a) According to the information and explanations given to us undisputed statutory duesincluding 'Tax Deducted at Source' 'Interest on Tax deducted at source' 'Service Tax''Property Tax' Custom Warehouse Rent' and 'Interest on Custom Duty' have not beenregularly deposited with the appropriate authorities and there have been delays in manycases.

b) According to the information and explanations given to us undisputed statutory duesremaining unpaid for a period of more than six months from the date they became payableare as given below:

Name of the Statute Nature of the Dues Amount Period to which the
(In Rs.) amount relates
Income Tax Act 1961 Tax Deducted at Source 7692012 March 2015 to September 2016
Interest on delay in deposit 1045000 February 1998 to November 1998
of Tax Deducted at Source 1268786 March 2015 to September 2016
Maharashtra Value Maharashtra Value Added 20498838 October 2010 to
Added Tax Act 2002 Tax (including Interest) September 2016
Mumbai Municipal Property Tax 165179016 April 2008 to
Corporation Act 1888 September 2016
Custom Act 1962 Interest on Custom Duty 18807434 May 2013 to September 2016
Custom Warehouse Rent 3580713 March 2013 to September 2016

c) According to the information and explanations given to us and the records examinedby us dues in respect of Income tax Maharashtra Value Added Tax Excise Duty Customduty and Service Tax as at March 312017 that have not been deposited with the appropriateauthority on account of any disputes and the forum where the dispute is pending are asunder:-

Sr.

No.

Name of the Statute Nature of the Dues Period to which the amount relates

Amount

(Rs.)

Forum where dispute is pending
1 Income Tax Act Income Tax April 2002 to March 2003

10886963

Assessing Authorities
1961 April. 2004 to March 2005

87493855

Supreme Court
April 2008 to March 2009

1762020

Income Tax Appellate Tribunal
April 2008 to March 2009

5041158

Commissioner of Income Tax (Appeal)
April 2011 to March 2012

183105565

Commissioner of Income Tax (Appeal)
April 2012 to March 2013

2283473527

Commissioner of Income Tax (Appeal)
April. 2013to March 2014

130330444

Commissioner of Income Tax (Appeal)
2 Income Tax Act 1961 Demand against short deduction of tax at source and interest thereon April. 1999 to March 2000

5664844

Commissioner of Income Tax (Appeal)
April 2000 to March 2001

45209

Income Tax Appellate Tribunal
April 2001 to March 2002

32050

Income Tax Appellate Tribunal
April 2009 to March 2010

1064630

Commissioner of Income Tax (Appeal)
3 M VAT Act2002 MVAT and Interest April 2007 to March 2008

20848345

Commissioner of Sales Tax
April 2008 to March 2009

8349216

Commissioner of Sales Tax
April. 2010to March2011

2569905

Commissioner of Sales Tax
April.2012toMarch2013

84695499

Commissioner of Sales Tax
4 Central Excise Act. 1944 Excise Duty

October 2000

339250

Customs Excise and Service Tax Appellate Tribunal
5 Service Tax under Finance Act. 1994 Service Tax

April2010to March 2013

62891213

Commissioner of Service Tax
Interest

July2010 to March2013

84740911

Service Tax

April2013to March2014

4906841

Commissioner of Service Tax
Interest

April 2013to March. 2014

3799299

In process of filing reply to Commissioner of Service Tax.
Service Tax

April 2014 to March. 2015

127914388

Commissioner of Service Tax
Interest

April2014to March 2015

59443286

6 Customs Act 1962 Custom Duty

July 2008

698250

Customs Excise and Service Tax Appellate Tribunal

viii) Based on our audit procedures and according to the information and explanationsgiven to us there have been defaults in the repayments of dues to the financialinstitutions and debenture holder as mentioned below:-

Particulars Amount of Default as at the Balance Sheet date (PrincipalAmount) Period of Default

(Principal

Amount)

Interest Period of Default (Interest) Remarks
1. Financial Institutions- a. SREI Equipment Finance Ltd. (NBFC) Nil 0-3 months 26661703

(Gross)

0-3 Months Delay in repayment of interest which were outstanding as on March 31 2017 (continuing default)
b. India Bull Housing Finance Ltd. 90.83.33.333

33.33.33.334

0-3 months 3-6 months 127455694

199798559

0-3 months 3-6 Months All Defaults during the year were made good on or before March 31 2017 except repayment of principal of Rs.166666667/- which was due on March 01 2017 (continuing default)

With regard to repayment of dues to Debenture holders we are informed that the Companyhas modified its terms of Issue of Debenture vide Memorandum of Understanding dt.28-02-2017 executed between the Company and the Debenture Holders deferring its originalterm in respect of payment of interest and principal redemption in instalment to the nextfive years with a condition that if the cash flow permits the Company will consider forprepayment. In view of the same there are no instances of defaults in repayment of duesto debenture holders.

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year and with regard to Term loanraised during the year according to the information and explanation given to us the termloans were applied forthe purposes forwhich they were raised.

x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by provisions of section197 read with Schedule V of the Companies Act2013.

xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and section 188 of the Companies Act2013 where applicableand details of such transactions have been disclosed in the financial statements asrequired by the applicable accounting standards.

xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

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

For HABIB & Co.

Chartered Accountants Firm Registration No. 103479W

(D. P. SHROFF)

Partner

Membership No. 045417

Place: Mumbai Date :27lh May 2017

Annexure-B to the Independent Auditors' Report

(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Shree RamUrban Infrastructure Limited ("the Company") as of March 312017 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 information as required underthe Companies Act 2013.

Auditors' 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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.

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 over financial reporting assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement 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 qualified audit opinion on the Company's internal financialcontrols system over 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 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 frauds 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 theinternal financial control over financial reporting needs to be strengthened in respect ofreview control of periodic reconciliation of balances in parties account including timelyresolution thereof to the extent of such parties covered in the basis for qualifiedopinion of our main audit report which could potentially result in the materialmisstatement in the value of Company's Loans and Advances and Trade Payables.

Opinion

In our opinion except for the effects of the matter described above on the achievementof the objectives of the control criteria the Company has maintained in all materialrespects an adequate internal financial control system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as atMarch 31 2017 based on the internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.

For HABIBS Co.

Chartered Accountants Firm Registration No. 103479W

(D.P. SHROFF)

Partner

Membership No. 045417

Place: Mumbai Date : 27'" May 2017