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Unity Infraprojects Ltd.

BSE: 532746 Sector: Infrastructure
NSE: UNITY ISIN Code: INE466H01028
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VOLUME 16906
52-Week high 10.75
52-Week low 4.31
P/E
Mkt Cap.(Rs cr) 74
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.00
CLOSE 6.07
VOLUME 16906
52-Week high 10.75
52-Week low 4.31
P/E
Mkt Cap.(Rs cr) 74
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Unity Infraprojects Ltd. (UNITY) - Auditors Report

Company auditors report

To the Members of Unity Infraprojects Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Unity InfraprojectsLimited ("the Company") which comprise the Balance Sheet as at March 31 2016the Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting 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 adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain

Auditors' Report audit evidence about the amounts and the disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgmentincluding 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 overallpresentation of the financial statements.

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.

Basis for Qualified Opinion a. We invite attention to Note 6 relating to loans& advances taken from parties under which loans & advances taken from ten partiesas at March31 2016 amounting to Rs.2290.15 Lakhs is deemed as public deposit in terms ofSection 73 of the Companies Act 2013 which amounts to violation of the same under theAct. b. We invite attention to Note 12 relating to loans & advances given to relatedparties covered under section 185 of the Companies Act 2013 under which loans &advances given to four parties during the year after 1 April 2015 amounting to Rs.1477.39Lakhs is in violation of the section 185 of the Companies Act 2013.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in theBasis for QualifiedOpinion paragraph the financial statements give the information required by the Act inthe 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 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone financialstatements: Note 46 to the financial statements which indicates that the Company hasaccumulated loses and its net worth has been substantially reduced and the Company hasincurred a net cash loss during the current and previous year. These conditions alongwith other matters set forth in the Note 46 cast doubt about the Company’s abilityto continue as a going concern. However the financial statements of the Company have beenprepared on a going concern basis for the reasons stated in the said Note.

Our opinion is not modified in respect of these matters.

3 Other Matter

We did not audit the financial statements of twelve joint ventures reflectingcompany’s share in Profit of Rs.700.54 Lakhs in these financial statements. Thesefinancial statements have been audited by other auditors whose reports have been furnishedto us by the Management and our opinion in so far as it relates to the amounts includedin respect of the said audited Joint Ventures is based solely on the reports of otherauditors.

Our opinion is not modified in respect of this matter. Report on Other Legal andRegulatory Requirements

1 As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure "I" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2 As required by section 143(3) of the Act we report that: a we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit; b in our opinion proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books; c the Balance Sheet the Statement of Profit and Loss and theCash Flow Statement dealt with by this Report are in agreement with the books of account;d in our opinion the aforesaid standalone financial statements comply with the AccountingStandards specified under Section 133 of the Companies Act 2013 read with Rule 7 of theCompanies (Accounts) Rules 2014; e The matter described in the Basis for QualifiedOpinion paragraph and under the Emphasis of Matters paragraph above in

Auditors' Report our opinion may have an adverse effect on the functioning of theCompany. f on the basis of written representations received from the directors as on March31 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of section164 (2) of the Act. g With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure II". h With respect to the other matters tobe included in the Auditor’s Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us: i. The Company has disclosed the impact ofpending litigations on its financial position in its financial statements – ReferNote 29 to the financial statements; ii. the Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

For C. B. Chhajed & Co.
Chartered Accountants
(Firm Regn No : 101796W)
C. B. Chhajed
Place : Mumbai {Partner}
Dated : 30.05.2016 Membership No : 009447

ANNEXURE "I" TO THE INDEPENDENT AUDITORS’ REPORT

[Referred to in paragraph 1 of "Report on other legal and regulatoryrequirements" of our report of even date]

TO THE MEMBERS OF UNITY INFRAPROJECTS LIMITED ('the ‘Company’)

1 a The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.b. The fixed assets of the Company have been physically verified by the management duringthe year and no material discrepancies between the book records and the physical inventoryhave been noticed. In our opinionthe frequency of verification is reasonable. c. In ouropinion and according to the information and explanations given to us the title deeds ofimmovable properties are held in the name of the company except in case of ‘Flat atTaloja’ carrying value of Rs. 3.92 Lakhs whose title deed is held in the name of Mr.Ramchandran director of one group company.

2 The inventory (excluding stocks with third parties) has been physically verified bythe management during the year. In respect of inventory lying with third parties thesehave substantially been confirmed by them. In our opinion the frequency of verificationis reasonable. No discrepancies were noticed on physical verification of inventory.

3 According to the information and explanations given to us the Company has grantedsecured / unsecured loans to a ten subsidiarycompanies two associate companies twojoint ventures and one partnership firm covered in the register maintained under Section189 of the Act. In respect of aforesaid loans a In our opinion and according to theinformation and explanations given to us the terms and conditions of such loans are notprima facie prejudicial to the interest of the Company. b The principal amounts arerepayable on demand and there is no repayment schedule. The interest is payable on demand.c In respect of the aforesaid loans the same are repayable on demand and therefore thequestion of overdue amounts does not arise. In respect of interest no interest is chargedby the company except on one company.

4 In our opinion the company has given loan to four companies in contravention ofSection 185 of the Act. However the company has complied with the provisions of section186 in respect of the loans investments guarantees and securities wherever applicable.

5 In our opinion and according to the information and explanations given to us theCompany has not complied with the directives issued by Reserve Bank of India and theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and theCompanies (Acceptance of Deposits) Rules 2014 with regard to the amount received from 10parties. which is deemed as public deposit in terms of Section 73 of the Act. According tothe information and explanations given to us no Order has been passed by the Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal on the company in respect of the aforesaid deposits.

6 "We have broadly reviewed the books of account maintained by the Company inrespect of products where pursuant to the Rules made by the Central Government of Indiathe maintenance of cost records has been prescribed under sub-section (1) of Section 148of the Act and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained as confirmed by the cost auditor appointed by the company.However the cost audit for the financial year 2014-15 has not been completed.

We have not however made a detailed examination of the records with a view todetermine whether they are accurate or complete." 7 a) Based on verification of Booksof Accounts and other records of the company examined by us in our opinion the Companyis not regular in depositing undisputed statutory dues namely provident fund investoreducation and protection fund employees’ state insurance income-tax sales-taxservice tax customs duty excise duty cess and other statutory dues as applicable withthe appropriate authorities. The Statutory dues outstanding as on Balance Sheet date for aperiod of more than six months from the date they became payable are listed below:

Name of the Statute Nature of Dues Amount (Rs. In Lakhs) Period to which the amount relates Date of Payment
The Income Tax Act 1961 Tax Deducted at Source 2287.06 F.Y. 2013-14 Not Paid
1013.67 F.Y. 2014-15 Not Paid
312.36 F.Y. 2015-16 Not Paid
Corporate Dividend Tax 120.19 F.Y. 2011-12 Not Paid
24.04 F.Y. 2012-13 Not Paid
Interest on CDT 23.32 F.Y. 2012-13 Not Paid
Interest on CDT 20.11 F.Y. 2014-15 Not Paid
Interest on CDT 14.51 F.Y. 2015-16 Not Paid
Interest on TDS 526.57 F.Y. 2014-15 Not Paid
Interest on TDS 718.58 F.Y. 2015-16 Not Paid
Employee State Insurance Act Sales Tax Act Employer’s Contribution 0.60 F.Y. 2015-16 Not Paid
Employees’ Contribution 0.20 F.Y. 2015-16 Not Paid
TDS on 92.60 F.Y. 2014-15 Not Paid
Works Contract 61.28 F.Y. 2013-14 Not Paid
37.11 F.Y. 2015-16 Not Paid
Provident Fund Provident Fund -
& Misc Act Employer’s Contribution 28.90 F.Y. 2015-16 Not Paid
Provident Fund -
Employees’
Contribution 25.95 F.Y. 2015-16 Not Paid
GVAT Finance Act 1994 Value Added Tax 8.05 F.Y. 2014-15 Not Paid
Service Tax 89.52 F.Y. 2014-15 Not Paid
64.96 F.Y. 2015-16 Not Paid
Various Profession Tax Laws Professional tax 23.81 F.Y. 2013-14 Not Paid
12.61 F.Y. 2014-15 Not Paid
4.95 F.Y. 2015-16 Not Paid

b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income-tax sales-tax service taxcustoms duty excise duty and cess as on Balance Sheet Date which have not been depositedon account of a dispute are as follows -

Name of the Statute Nature of Dues Amount (Rs. In Lakhs) Period to which the amount relates Forum where the dispute is pending
Income Tax Act1961 Income Tax 47.27 A.Y.2005-06 Income Tax Appellate Tribunal Mumbai
Income Tax Act1961 Income Tax 17.55 A.Y.2006-07 Income Tax Appellate Tribunal Mumbai
Income Tax Act1961 Income Tax 180.11 A.Y.2006-07 Commissioner of Income Tax Appeal
Income Tax Act1961 Income Tax 209.36 A.Y.2007-08 Income Tax Appellate Tribunal Mumbai
Income Tax Act1961 Income Tax 11.99 A.Y.2007-08 Commissioner of Income Tax Appeal
Income Tax Act1961 Income Tax 33.20 A.Y.2008-09 Income Tax Appellate Tribunal Mumbai
Income Tax Act1961 Income Tax 1160.92 A.Y.2008-09 Commissioner of Income Tax Appeal
Income Tax Act1961 Income Tax 327.39 A.Y.2009-10 Commissioner of Income Tax Appeal
Income Tax Act1961 Income Tax 4753.12 A.Y.2010-11 Commissioner of Income Tax Appeal
Income Tax Act1961 Income Tax 3689.33 A.Y.2011-12 Commissioner of Income Tax Appeal
Income Tax Act1961 Income Tax 2916.86 A.Y.2012-13 Commissioner of Income Tax Appeal
Income Tax Act1961 Income Tax 4848.83 A.Y.2013-14 Commissioner of Income Tax Appeal
Maharashtra Value Added Tax Act 2002 Maharashtra Value AddedTax 162.22 A.Y.2006-07 (Appeal - VI) Joint Commissioner of Sales Tax
Maharashtra Added Tax Act 2002 Maharashtra Value Added Tax 1.90 AY 2007-08 Joint Commissioner of Sales Tax (Appeal - VI)
Maharashtra Value Added Tax Act 2002 Maharashtra Value Added Tax 4301.22 A.Y.2009-10 Joint Commissioner of Sales Tax (Appeal - VI)
Maharashtra Value Added Tax Act 2002 Maharashtra Value Added Tax 8.94 AY2010-11 Joint Commissioner of Sales Tax (Appeal - VI)
Maharashtra Value Added Tax Act 2002 Maharashtra Value Added Tax 123.25 A.Y.2011-12 Joint Commissioner of Sales Tax (Appeal - VI)
Madhya Pradesh Value Added Tax Act 2002 Madhya Pradesh Value Tax 323.57 A.Y.2013-14 Commissioner of Sales Tax
Central Excise Act 1944 Excise 9.09 F.Y. 2012-13 Appellate Tribunal Cestat
Central Excise Act 1944 Excise 30.42 F.Y. 2013-14 Appellate Tribunal Cestat
Central Excise Act 1944 Excise 8.36 F.Y. 2014-15 Appellate Tribunal Cestat
Finance Act 1994 Service Tax 56015.21 F.Y. 2010-11 to F.Y. 2014-15 Adjudication Cell Principal Commissioner Service Tax -III

8 According to the records of the Company examined by us and the information andexplanation given to us the Company has not paid installment including interest thereonto financial institutions and banks since amount payable has been converted into WorkingCapital Term Loan Funded Interest Term Loan and equity shares as per the CDR Sceme withCDR Lenders.

9 The Company has not raised money by way of initial public offer or further publicoffer or debt instruments. Term loans taken by the company in our opinion and accordingto the information and explanations given to us on an overall basis have been appliedfor the purposes for which they were obtained.

10 During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud on or by the Company noticed or reported during the year nor have webeen informed of such case by the management.

11 According to the information and explanations given to usThe company has providedtotal managerial remuneration of Rs. 202.00 Lakhs upto 31st December 2015 which wasexcess by Rs. 43.84 Lakhs of overall limit prescribed by section 197 read with schedule Vto the Act. However the said remuneration was not actually paid to managerial persons andexcess amount provided in the books is now reversed.

12 In our opinion and according to the information and explanations given to us thecompany is not a nidhi company. Accordingly clause (xii) of paragraph 3 of the order isnot applicable to the company.

13 In our opinion and according to the information and explanations given to us thecompany has complied with sections 177 and 188 of the Act in respect of transactionsentered with the related parties during the year. Details of the transactions have beenadequately disclosed in Note 38 of the Financial Statements.

14 According to the information and explanations given to us the company has issued26420784 equity shares to promoter Company and 20368638 equity shares to CDR Lenderson preferential basis as per the Corporate Debt Restructuring Sceme which has beenapproved by the CDR Cell vide their letter dated 26th December 2014.

15 According to the information and explanations given to us the Company has notentered into any non-cash transactions during the year with the directors or personsconnected with directors. Accordingly clause (xv) of paragraph 3 of the order is notapplicable to the company.

16 According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly clause (xvi) of paragraph 3 of the order is not applicable to the company.

For C. B. Chhajed & Co.
Chartered Accountants
(Firm Regn No. : 101796W)
Place : Mumbai C. B. Chhajed
Dated : 30.05.2016 {Partner}
Membership No : 009447

ANNEXURE "II"TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF UNITY INFRAPROJECTS LIMITED

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 UnityInfraprojects Limited ("the Company") as of March 31 2016 in conjunction withour audit of the financial statements of the Company for the year 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 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 Act.

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 controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For C. B. Chhajed & Co.
Chartered Accountants
(Firm‘s Regn. No. 101796 W)
C. B. Chhajed
(Partner)
Place : Mumbai
Dated : 30.05.2016