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Supreme Infrastructure India Ltd.

BSE: 532904 Sector: Engineering
NSE: SUPREMEINF ISIN Code: INE550H01011
BSE 15:40 | 19 Jan 121.70 -3.25
(-2.60%)
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126.00

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119.20

NSE 15:40 | 19 Jan 123.00 -1.00
(-0.81%)
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125.00

HIGH

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OPEN 119.20
PREVIOUS CLOSE 124.95
VOLUME 8406
52-Week high 132.30
52-Week low 68.00
P/E
Mkt Cap.(Rs cr) 313
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 119.20
CLOSE 124.95
VOLUME 8406
52-Week high 132.30
52-Week low 68.00
P/E
Mkt Cap.(Rs cr) 313
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Supreme Infrastructure India Ltd. (SUPREMEINF) - Auditors Report

Company auditors report

To the Members of Supreme Infrastructure India Limited Report on the StandaloneFinancial Statements

1. We have audited the accompanying standalone financial statements of SupremeInfrastructure India Limited(‘the Company') which comprise the Balance Sheet as at31March 2017 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the

StandaloneFinancial Statements

2. 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 of thesestandalone financial statements that give a true andfair view of the state ofafiairs(financial position) profit or loss (financial performance including othercomprehensiveincome) cash fiows and changes in equity of the Companyin accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards(‘Ind AS') specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable andprudent; and design implementationand maintenance ofadequate internal financial controls that were operating efiectivelyfor ensuring the accuracy and completeness ofthe accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

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 arerequired to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditingspecified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and planand perform the audit to obtain reasonable assurance aboutwhetherthese standalone financial statements are free from material 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 controls relevant to the Company's preparation of the financial statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors aswell as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

8. a) As stated in Note 11 (b) to the standalone financial statements the Company'strade receivables and unbilled work (other current financial assets) as at 31 March 2017include amounts aggregating Rs 6616.13 lakhs and Rs 3074.86 lakhs respectively inrespect of projects which were closed / terminated by the clients and where the mattersare currently under negotiations / litigation being considered good and recoverable bythe management. However in absence of suficient appropriate evidence to corroborate themanagement's assessment of recoverability of these balances we are unable to comment uponthe recoverability of the aforesaid amounts and the consequential impact if any on theaccompanying standalone financial statements that may arise on settlement of the aforesaidmatters. Our Opinion on the standalone financial statements for the year ended 31 March2016 was also qualified in respect of these matters.

b) As stated in Note 11 (c) to the standalone financial statements the Company's tradereceivables as at 31 March 2017 include amounts aggregating Rs 23507.17 lakhsin respectof projects which were closed and where the receivables remain outstanding for asubstantial period being considered good and recoverable by the management. However inabsence of suficient appropriate evidence to corroborate the management's assessment ofrecoverability of these balances we are unable to comment upon the recoverability of theaforesaid amounts and the consequential impact if any on the accompanying standalonefinancial statements that may arise on settlement of the aforesaid matters. Our opinion onthe standalone financial statements for the year ended 31 March 2016 was also qualified inrespect of these matters.

Qualified Opinion

9. In our opinion and to the best of our information andaccording to the explanationsgiven to usexcept for the possible efiects of the matters described in the Basis forQualified Opinion paragraphthe aforesaidstandalone financial statements give theinformationrequired by the Act in the manner so required and give a trueand fair view inconformity with the accounting principles generally accepted in India including Ind ASspecified under Section 133 of the Act of the state of afiairs (financial position) ofthe Company as at 2017 and its loss (financial performanceincluding other comprehensiveincome) its cash fiows andthe changes in equity for the year ended on that date.

Other Matter

10. The Company had prepared separate sets of statutory financial statements for theyears ended 31 March 2016 and 31 March 2015 in accordance with Accounting Standardsprescribed under Section 133 of the Act read with Rule 7 of the Companies(Accounts)Rules 2014 (as amended) on which we issued auditor's reports to the shareholders of theCompany dated 30 May 2016 and 2 June 2015 respectively.These financial statements havebeen adjusted for the difierences in the accounting principles adopted by the Company ontransition to Ind ASwhich have also been audited by us. Our opinion is not qualified inrespect of this matter.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor's Report) Order2016 (‘the Order')issued by the Central Government of India interms of Section 143(11) of the Act we givein the Annexure 1a statement on the matters specified in paragraphs 3 and 4of the Order.

12. Further to our comments in Annexure 1 as required by

Section 143(3) of the Act we report that:

a) we have sought and except for the possible efiects of the matters described in theBasis for Qualified Opinion paragraph obtained all the information and explanations whichto the best of our knowledge and belief were necessary for the purpose of our audit;

b) except for the possible efiects of the matters described in the Basis for QualifiedOpinion paragraph in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) the standalone financial statements dealt with by this report are inagreement withthe books of account;

d) except for the possible efiects of the matters described in the Basis for QualifiedOpinion paragraph in our opinion the aforesaid standalone financial statements complywith Ind AS specified under Section 133 of the Act;

e) the matters described in Basis for Qualified Opinion paragraph in our opinion mayhave an adverse efiect on the functioning of the Company;

f) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as at 31 March2017 from being appointed as a director n terms of Section 164(2) of the Act;

g) the qualification relating to the maintenance of accounts and other mattersconnected there with are as stated in the Basis for Qualified Opinion paragraph;

h) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as at 31 March 2017 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 30 May 2017as per Annexure 2 expressed a qualified opinion;

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 as detailed in Notes11 (b) 11 (c)

15.9 18.2 18.3 30(a)(i) 30(a) (iii) to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position;

ii. except for the possible efiects of the matters described in the Basis for QualifiedOpinion paragraph the Company as detailed in Note 2.1 xiii (a) to the standalonefinancial statements has made provision as requiredunder the applicable law or Ind ASfor material foreseeable losses if any on long-term contracts including derivativecontracts;

iii. There are no delays in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company;

iv. the Company as detailed in Note 12.1 to the standalone financialstatements has made requisite disclosures in these standalone financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016.

Based on the audit procedures performed and taking in to consideration the informationand explanations given to us in our opinion these are in accordance with the books ofaccount maintained by the Company.

For Walker Chandiok & Co LLP For Shah & Kathariya
Chartered Accountants Chartered Accountants
Firm Registration No: Firm Registration No:
001076N/N500013 115171W
per Adi. P. Sethna per P.M. Kathariya
Partner Partner
Membership No: 108840 Membership No: 31315
Mumbai Mumbai
30 May 2017 30 May 2017

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

Of even date to the members of Supreme Infrastructure India Limited on the standalonefinancial statements for the year ended 31 March 2017

Annexure 1

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 account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: (i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. In accordance with this program certain fixed assets were verifiedduring the year and no material discrepancies were noticed on such verification. (c) Thetitle deeds of all the immovable properties (which are included under the head‘Property plant and equipment') are held in the name of the Company. (ii) In ouropinion the management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies between physical inventory andbook records were noticed on physical verification.

(iii) The Company has granted unsecured loans tofour companies covered in the registermaintained under Section 189 of the Act; and with respect to the same: (a) in our opinionthe terms and conditions of grant of such loans are not prima facie prejudicial to theCompany's interest.

(b) the schedule of repayment of the principal and the payment of the interest has notbeen stipulated and hence we are unable to comment as to whether repayments/receipts ofthe principal amount and the interest 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) In our opinion the Company has complied withthe provisions of Sections 185 and 186 of the Act to the extent applicable in respect ofloans investments guarantees and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(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 undersub-section (1) of Section 148 of the Act in respect of Company's products/services andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. However we have not made a detailed examination of the cost records witha view to determine whether they 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 valueadded tax cess and other material statutory dues as applicable have not been regularlydeposited to the appropriate authorities and there have been significant delays in a largenumber of cases. Undisputed amounts payable in respect thereof which were outstanding atthe year-end for a period of more than six months from the date they became payable are asfollows:

Statement of arrears of statutory dues outstanding for more than six months:

Name of the statute Nature of the dues Amount in Lakhs Period to which the amount relates Due Date Date of Payment
Income Tax Act 1961 The Employees' Tax Deducted at Source 1604.41 April 2015 to August 2016 Various Dates Not yet Paid
Provident Funds and Miscellaneous Provident Fund 159.92 August 2015 to August 2016 Various Dates Not yet Paid
Provisions Act 1952 Profession Tax Act1975 Profession Tax 0.33 April 2016 to August 2016 Various Dates Not Yet Paid
Employees' State Insurance Act 1948 Employees'State InsuranceCorporation 3.31 April 2016 to August 2016 Various Dates Not yet Paid
The Central Excise Act 1944 Excise Duty 57.27 December 2012 to August 2016 Various Dates Not yet Paid
Finance Act 1994 Service Tax 68.01 March 2012 to August 2016 Various Dates Not yet Paid

(b) here are no dues in respect of income-tax sales-tax duty of customs duty ofexcise and value added tax that have not beenT deposited with the appropriate authoritieson account of any dispute. The dues outstanding in respect of service tax on account ofany dispute are as follows:

Name of the statute Nature of the dues Amount in Lakhs Amount paid under Protst in Lakhs Period to which the amount relates Forum where dispute is pending
Service tax Custom Excise and
The Finance Act 1994 including interest and penalty 7270.26 - FY 2008-09 to 2011-12 Service Tax Appellate Tribunal

(viii) There are no loans or borrowingspayable to government and no dues payable todebenture holders. The Company has defaulted in repayment of following dues tothebanksand financial institutions during the year which were paid on or before theBalance Sheet

Day's 0 - 30 days 31 - 90 days 91 - 180 days 181 - 365 days 365 - 730 days
Bank
State Bank of Patiala 2.20 4.01 - - -
Union Bank of India - 31.19 - - -
Punjab National Bank 202.87 252.45 137.76 0.31 -
Bank of India - 8.33 - - -
Central Bank of India 6.43 5.77 - - -
Canara Bank 3.81 2.81 - - -
ICICI Bank 54.93 166.47 419.80 413.95 -
Axis Bank 9.19 13.59 9.03 - -
Name of Financial Institutions
SREI Equipment Finance Limited - - 281.72 2314.86 -
L&T Infrastructure Finance Company
- 95.75 610.21 55.05 -
Limited
L&T Finance Limited 1.59 4.35 1.14 - -

The Company has defaulted in repayment of following dues to the financial institutionsand banks during the year which were not paid as at the Balance Sheet date.

Rs in Lakhs
Day's 0 - 30 31 - 90 days 91 - 180 181 - 365 365 - 730
days days days days
Name of Bank
State Bank of India 838.29 1797.09 1031.12 2935.06 -
State Bank of Patiala 231.92 692.49 469.15 725.74 -
Union Bank of India 317.03 747.17 417.90 808.17 -
Punjab National Bank 184.06 86.87 - - -
Bank of India 166.92 430.54 267.99 499.09 -
Central Bank of India 150.59 325.23 152.24 387.77 -
Syndicate Bank 53.01 100.39 48.22 138.87 65.94
Canara Bank 135.99 322.97 188.21 509.26 5.71
ICICI Bank 241.27 586.39 121.20 - -
Axis Bank 40.20 75.65 35.98 53.98 -
HDFC Bank 12.22 36.65 24.44 73.31 415.63
Indian Overseas Bank 22.00 66.00 44.00 132.00 2460.14
Name of Financial Institution
SREI Equipment Finance Limited 586.93 1214.31 1719.37 1856.01 -
SREI Infrastructure Finance Limited 80.43 98.57 74.98 248.85 1008.31
L&T Infrastructure Finance Company Limited 173.95 253.89 73.36 - -
L&T Finance Limited 34.00 44.80 22.18 63.39 -

ix) he Company did not raise moneys by way of initialT public ofier or further publicofier (including debt instruments). In our opinion the term loans availed during the yearwere applied for the purposes for which the loans were obtained.

(x) No fraud by the Company or on the Company by its oficers or employees has beennoticed or reported during the period covered by our audit.

(xi) The Company has not paid or provided for any managerial remuneration. Accordinglythe provisions of Clause 3(xi) of the Order are not applicable to the Company.

(xii) In our opinion the Company is not a Nidhi Company.

Accordingly the provisions of clause 3 (xii) of the Order are not applicable to theCompany.

(xiii) In our opinion all transactions with the related parties are in compliance withsections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable accountingstandards.

(xiv) During the year the Company has not made any preferential allotment/privateplacement of shares/fully/ partly convertible debentures.

(xv) In our opinion the Company has not entered into any non-cash transactions withdirectors or persons connected with them covered under Section 192 of the Act.

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

For Walker Chandiok & Co LLP For Shah & Kathariya
(formerly Walker Chandiok & Co) Chartered Accountants
Chartered Accountants Firm Registration No: 115171W
Firm Registration No: 001076N/N500013
per Adi. P. Sethna per P.M. Kathariya
Partner Partner
Membership No: 108840 Membership No: 31315
Mumbai Mumbai
30 May 2017 30 May 2017

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

Of even date to the members of Supreme Infrastructure India Limited on the standalonefinancial statements for the year ended 31 March 2017

Independent Auditor's report on the Internal Financial Controls under Clause (i) ofSub-section (3) ofSection 143 of the Companies Act 2013 (‘the Act')

In conjunction with our audit of the standalone financial statements of SupremeInfrastructure India Limited (‘the Company') as at and for the year ended 31 March2017 we have audited the internal financial controls over financial reporting (IFCoFR) ofthe Company as at that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting(‘the Guidance Note') issued by the Institute of Chartered Accountants ofIndia(‘the ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operatingefiectively forensuring the orderly and eficient conduct of the company's business including adherencetocompany's policies the safeguarding of its assets the prevention and detection offrauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's IFCoFR based on our audit.We conducted our audit in accordance withthe Standards on Auditing issued by the ICAIanddeemed to be prescribedunder section 143(10) of the Act to the extent applicable to anaudit of IFCoFR and the Guidance Note issued by the ICAI. Those Standards and theGuidanceNote require that we comply with ethical requirements and plan and perform theaudit toobtain reasonable assurance about whether adequate IFCoFR were established andmaintained and if such controls operated efiectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe IFCoFR and their operating efiectiveness. Our audit of IFCoFR included obtaininganunderstanding of IFCoFR assessing the risk that amaterial weakness exists and testingand evaluating the design and operating efiectiveness ofinternal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financialstatements whether due tofraud or error.

We believe that the audit evidence we have obtained is suficient and appropriate toprovidea basis for our qualified opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

A company's IFCoFR is a process designed to providereasonable assurance regarding thereliability of financial reporting and the preparation ofinancial statements for externalpurposes in accordance with generally accepted accountingprinciples. A company's IFCoFRincludes those policiesand procedures that (1) pertain to the maintenance of records thatin reasonable detailaccurately and fairly refiect the transactions and dispositions ofthe assets of the company; (2)provide reasonable assurance that transactions are recordedas necessary to permit preparationof financial statements in accordance with generallyaccepted accounting principles and thatreceipts and expenditures of the company are beingmade only in accordance withauthorisations of management and directors of the company; and(3) provide reasonableassurance regarding prevention or timely detection of unauthorisedacquisition use ordisposition of the company's assets that could have a material efiecton the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of IFCoFR includingthe possibility of collusion orimproper management override of controls material misstatementsdue to error or fraud mayoccur and not be detected. Also projections of any evaluation of the IFCoFR to futureperiods are subject to the risk that IFCoFR may become inadequate because of changesinconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Basis for Qualified Opinion

In our opinion according to the information and explanations given to us and based onour audit procedures performed the following material weakness has been identified in theoperating efiectiveness of the Company's IFCoFR as at 31 March 2017: The Company'sinternal financial controls in respect of supervisory and review controls over process ofdetermining impairment allowance for trade receivables which are doubtful of recovery andassessment of recoverability of unbilled work were not operating efiectively. Absence ofdetailed assessment conducted by the management for determining the recoverability oftrade receivables and unbilled work that remain long outstanding in our opinion couldresult in a potential material misstatement to the carrying value of trade receivables andunbilled work and consequently could also impact the loss (financial performanceincluding comprehensive income) after tax.

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 financial statements orinterim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion the Company has in all material respects maintained adequate IFCoFRas at 31 March 2017 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance note issued by the ICAI and except for the efiects of the materialweakness described above in the Basis for Qualified Opinion paragraph the Company'sIFCoFR were operating efiectively as at 31 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 31 March 2017 and the materialweakness has afiected our opinion on the standalone financial statements of the Companyand we have issued a qualified opinion on the standalone financial statements.

For Walker Chandiok & Co LLP For Shah & Kathariya
(formerly Walker Chandiok & Co) Chartered Accountants
Chartered Accountants Firm Registration No: 115171W
Firm Registration No: 001076N/N500013
per Adi. P. Sethna per P.M. Kathariya
Partner Partner
Membership No: 108840 Membership No: 031315
Mumbai Mumbai
30 May 2017 30 May 2017