CMM INFRAPROJECTS LIMITED
Report on thefinancial Statements
We have audited the accompanying financial statements of CMM INFRAPROJECTS LIMITEDShalimar Corporate Centre 108 8B Nath Mandir Road South Tukoganj Indore MadhyaPradesh 452001 which comprises of the Balance Sheet as at 31 March 2019 theStatement of Pro t and Loss and cash flow statement for the year then ended and a summaryof significant accounting policies and other explanatory information of the company.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) In the case of the Balance Sheet of the state of affairs of the company as at 31March 2019; and
(b) In the case of the Statement of Pro t and Loss of the profit for the year ended onthat date;
(c) In the case of the Cash Flow Statement for the year ended on that date
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthefinancial Statements section of our report. We are independent of the Company inaccordance with the Code of ethics issued by the Institute of Chartered accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.There is no key audit matter to be communicated in our report.
We do not audited the two branches Nagpur and Bhubaneswar. These financial statementhave been audited by other auditors whose reports have been furnished to us by themanagement and our opinion on the financial statement of the company for the year endedto the extent they relate to the financial statement not audited by us stated in thisparagraph is solely based on the audit report of other auditor. Our opinion is notqualified in respect of this matter.
Information Other than thefinancial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report and BusinessResponsibility Report but does not include the financial statements and our auditor'sreport thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for thefinancial 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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance total comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India prescribed under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating 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 misstatements whether due to fraudor error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of thefinancial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatements whether due to fraud orerror and to issue an auditor's report that includes our opinion. Reasonable assurance isa high level of assurance but it is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercised professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 A" statement on the matters specifiedin the paragraph 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 obtained all the information and explanations which to the best ofour 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 appears from our examination of those books
c. In our opinion the Balance Sheet Statement of Pro t and Loss and cash flowstatement dealt with by this Report are in agreement with the books of account ;
d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act with the rule of the Companies(Accounts)Rules 2014;
e. On the basis of written representations received from the directors as on 31 March2019 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2019 from being appointed as a director in terms of Section 164(2) of theAct.
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'. Our Report expresses disclaimer of opinion onthe company's internal financial controls over financial reporting for the reason statedtherein.
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 litigation on its financial positionin its financial statement. (Refer Note 28)
ii. The company does not have any long term contracts including derivative contractsfor which 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: SPARK& Associates
Chartered Accountants FRN: 005313C
Pankaj Kumar Gupta
Membership No. 404644
Date : 30.05.2019 Indore
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
The annexure referred to the Independent Auditors' Report to the members of the companyon the financial statements for the year ended 31 March 2019 we report that:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The Company does not have a regular programme of physical verification of its fixedassets however certain fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is not reasonable having regard to the size of the Company and thenature of its assets.
(c) The Company does not have any immovable property under Fixed Asset head.
ii. As explained to us the physical verification of certain inventory has beenconducted at reasonable intervals by the management and no material discrepancies werenotice on such verification. As explained by the management that the company is involvedin construction activities and there are so many items spread out at the site so it isvery difficult to maintain the quantitative records of each and every item.
iii. In our opinion and according to the information and explanations given to us theCompany has granted unsecured loans to companies firms or other parties covered in theregister maintained under section 189 of the Companies Act 2013 (the Act').
a) In our opinion loans and advances granted by company is prejudicial in company'sinterest since loans are Non- Interest Bearing.
b) There is no legal loan agreement between company and borrower containing the termsfor the repayment of loan
|S. No ||Name of Party ||Amount ||Reasonable Steps |
|1 ||Laxmi Logistic ||500000 ||Constant Follow up has been taken |
|2 ||Shiv Jyoti Estate ||1246977 ||Constant Follow up has been taken |
iv. In our opinion and according to the information and explanation given to usthe company has not complied with section 185 of Companies Act 2013. Company has grantedloan to Laxmi Logistic and Shiv Jyoti Estate (Director having controlling Interest). TheCompany has complied with Section 186 of Companies Act2013 as applicable.
v. The company has not accepted any deposit from public.
vi. According to the information and explanations provided to us the Companies (CostAccounting Record) Rules 2011 have been applicable to the companies for its constructionoperations. The Company has appointed Sushil Kumar Mantri & Associates CostAccountant (FRN: 101049) to reviewed books of accounts maintained by the company andpursuant to the rules made by the Central Government for maintenance of Cost Records undersub section (I) of section 148 of the Act in respect of construction activity. The finalaudit report of the Independent Cost Auditor is not provided by the company hence we arenot able to give any comment on cost records maintained by the company.
vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records the Company has been irregular in depositing undisputedstatutory dues excluding GST.
(b) According to the information and explanations given to us undisputed amountspayable in respect of provident fund income tax sales tax service tax duty of customsvalue added tax Goods and Service tax cess and other material statutory dues were inarrears as at 31 March 2019 for a period of more than six months from the date theybecame payable.
|S.No ||Type of Dues ||Period to which amount relates ||Amount |
|1. ||Provident Fund ||FY 2018-19 ||112320 |
|2. ||E.S.I.C ||FY 2018-19 ||99353 |
| || || ||76736 |
|3. ||T.D.S ||FY 2018-19 ||3085569 |
| || ||FY 2017-18 ||4208079 |
|4. ||Income Tax ||FY 2017-18 ||6356210 |
(c) The disputed statutory dues aggregating Rs.30896740 that have not been depositedon account of disputed matters pending before appropriate authorities are as under:
|S.No ||Name of the Statute ||Nature of the Dues ||Amount Pending ||Period to which the amount relates ||Forum Where dispute is pending |
|1 ||Service Tax ||Service tax Demand ||30896740 ||January 2013 to March 2016 ||DGCEI INDORESERVICE TAX |
viii. Based on our audit procedure and according to the information and explanationsgiven to us we are of the opinion that the Company has defaulted in repayment of loans /borrowings to the financial institutions banks Government or debenture holders as perdetails given here-under:.
|S.No ||Particular of Bank/Fifinancial Institution ||Amount of Default ||Period of Default (in Days) |
| || ||Principal ||Interest || |
|1 ||CAPITAL FIRST LTD-2 ||411979 ||74533 ||60 |
|2 ||TATA CAPITAL ||145619 ||638 ||30 |
|3 ||ICICI BANK (CE-10) ||193027 ||33974 ||240 |
|4 ||ICICI BANK (CE -123) ||801372 ||137322 ||210 |
|5 ||ICICI BANK (CE -45678) ||944908 ||164626 ||240 |
|6 ||ICICI BANK(911) ||225511 ||48248 ||300 |
|7 ||ICICI BANK LTD (LOADER ) ||658876 ||76285 ||120 |
|8 ||ICICI BANK (DUMPER 1) ||259993 ||22741 ||30 |
|9 ||ICICI BANK (TANDAM ROLLER) ||409295 ||67192 ||240 |
|10 ||ICICI BANK (TANDAM ROLLER) ||747059 ||146355 ||450 |
|11 ||HDFC BANK (FINE ROCK BRAKER) ||247359 ||38391 ||300 |
|12 ||HDFC BANK (MOTOR GRADER) ||3323801 ||467539 ||270 |
|13 ||HDFC BANK (POCLAIN - HYUNDAI) ||894904 ||138896 ||300 |
|14 ||HDFC BANK (POCLAIN - KOMATSU) ||1042009 ||161740 ||300 |
|15 ||HDFC BANK (SOIL COMPACTOR) ||1817458 ||282092 ||300 |
|16 ||HDFC BANK (TEREX CRUSHER) ||7242000 ||1507400 ||300 |
|17 ||HDFC BANK (MAHINDRA DUMPER) ||5515345 ||917495 ||300 |
|18 ||HDFC BANK (NEW BOLERO) ||310584 ||41305 ||210 |
|19 ||HDFC BANK (POCLAIN-2) ||1091533 ||149677 ||300 |
|20 ||HDFC BANK (VSI-1000) ||430389 ||75611 ||330 |
|21 ||SREI FINANCE LTD ||302000 ||12000 ||30 |
| ||TOTAL ||27015021 ||4564060 || |
Except above The Company has also defaulted in repayment of loan of Kotak Mahindra BankSince Loan statement has not been produced before us we cannot ascertain Default amountand outstanding period of default of aforesaid loan.
ix. The company has raised money by way of term loan and the same was applied for thepurpose for which it has been raised. The company has not made any further public offeringduring the year.
x. According to the information and explanations given to us no fraud by the Companyor on the company by its of cers or employees has been noticed or reported during thecourse of our audit.
xi. According to the information and explanation 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 by the provisions of section 197read with Schedule V to the Act.
xii. In our Opinion and according to the information and explanation given to us theCompany is not a Nidhi company.
xiii. According to our information and explanation given to us and based on ourexamination of the records of the company transaction with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransaction have been disclosed in the financial statement as required by the applicableaccounting standards.
xiv. According to information and explanation given to us and based on our examinationof the records of the company the company has not made any preference allotment orprivate allotment of shares or fully or partly convertible debentures during the year.
xv. According to information and explanation given to us and based on our examinationof the records the company has not entered into non-cash transaction with the directorsor persons connected with him. Accordingly paragraph 3 (xv) of the order is notapplicable.
xvi. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
|For: SPARK& Associates |
|Chartered Accountants |
|FRN: 005313C |
|Pankaj Kumar Gupta |
|Membership No. 404644 |
|Date : 30.05.2019 Indore |
ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT
Report on the Internalfinancial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013
We have audited the internal financial controls over financial reporting of CMMINFRAPROJECTS LIMITED as at 31 March 2019 in conjunction with our audit of thefinancial statements of the company for the year ended on that day.
Management's Responsibility for Internalfinancial Controls
The Company is responsible for establishing and maintaining internal financial controlsbased on the internal control over financial reporting criteria established by the companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internalfinancial Controls overfinancial Reporting issued by the Institute ofChartered Accountants of India. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required by the Companies Act 2013.
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 Internalfinancial Controls Overfinancial Reporting (the"Guidance Note") and the Standards on Auditing deemed to be prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of internal financial controls and both issued bythe ICAI. 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat 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 judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.
Meaning of Internalfinancial Controls overfinancial 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.
Basis for Disclaimer of Opinion
According to information and explanation given to us the company has not establishedits internal financial control over financial reporting on criteria based on orconsidering the essential components of internal control stated in Guidance note issued byInstitute of Chartered Accountants of India.
Disclaimer of Opinion
Because of the signi cance of the matter described in the Basis of Disclaimer ofOpinion paragraph above we are unable to obtain sufficient appropriate audit evidence toprovide a basis of our opinion whether company had adequate internal financial controlover financial reporting and whether such internal financial control were operatingeffectively as at 31stMarch 2019. Accordingly we don't express an opinion on the companyinternal financial control over financial reporting.
We have considered the disclaimer reported above in determining the nature timing andextent of audit test applied in our audit of financial statement of company for the yearended 31st March 2019 and the disclaimer does not affect our opinion on the saidfinancial statement of company.
For: SPARK& Associates
Chartered Accountants FRN: 005313C
Pankaj Kumar Gupta
Membership No. 404644.
Date : 30.05.2019 Indore