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CMM Infraprojects Ltd.

BSE: 535023 Sector: Infrastructure
NSE: CMMIPL ISIN Code: INE289S01013
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CMM Infraprojects Ltd. (CMMIPL) - Auditors Report

Company auditors report

To

The Members

CMM INFRAPROJECTS LIMITED Indore (M.P.)

CIN: L45201MP2006PLC018506 Report on the Financial Statements

We have audited the accompanying financial statements of CMMINFRAPROJECTS LIMITED Shalimar Corporate Centre 108 8B Nath Mandir Road SouthTukoganj Indore Madhya Pradesh 452001 which comprises of the Balance Sheet as at 31stMarch 2020 the Statement of Profit and Loss and cash flow statement for the year thenended and a summary of significant accounting policies and other explanatory informationofthe company.

Unqualified Opinion

In our opinion and to the best of our information and according to theexplanations given to us the financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:

(a) In the case ofthe Balance Sheet ofthe state of affairs ofthecompany as at 31st March 2020; and

(b) In the case ofthe Statement of Profit and Loss of the profit forthe year ended on that date;

(c) In the case ofthe Cash Flow Statement for the year ended on thatdate

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit ofthe Financial Statements section of our report. We are independent of the Companyin accordance with the Code of ethicsissued 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 professionaljudgement were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. There is no key audit matter to be communicated in ourreport.

Other Matters

We do not audited the two branches Nagpur and Bhubaneswar. Thesefinancial statements have been audited by other auditors whose reports have been furnishedto us by the management and our opinion on the financial statement of the company for theyear ended to the extent they relate to the financial statement not audited by us statedin this paragraph is solely based on the audit report of other auditor. Our opinion is notqualified in respect of this matter.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report and Business Responsibility Report but does not includethe financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit ofthe financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation and presentation of these financial statements that give a true and fairview of the financial position financial performance total comprehensive income changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India prescribed under Section 133 of the Act.This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the 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 thefinancial statements that givea true and fair view and are free from material misstatements whether due to fraud orerror.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatements whether due tofraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but it is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercised professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(I) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 of the Act we give in the "Annexure A" statement on thematters specified in the paragraph 3 and 4 ofthe Order to the extent applicable.

2. As required by section 143(3) ofthe Act We report that:

a. We have sought obtained all the information and explanations whichto the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have beenkept by the Company so far as appears from our examination ofthose books

c. In our opinion the Balance Sheet Statement of Profit and Loss andcash flow statement dealt with by this Report are in agreement with the books of account;

d. In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 ofthe Act with the rule ofthe Companies(Accounts)Rules 2014;

e. On the basis of written representations received from the directorsas on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March2020 from being appointed as adirector in terms of Section 164(2) ofthe Act.

f. 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 B'. Our Report expresses disclaimer ofopinion on the company's internal financial controls over financial reporting for thereason stated therein.

g. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us.

i. The company does not have any pending litigation which would impactits position as on 31-03-2020.

ii. The company does not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the company.

h. With respect to the matter to be included in the Auditors'Report under section 197(16) ofthe Act as amended:

i. In our opinion and according to the information and explanationsgiven to us the remuneration paid by the Company to

its managing director during the year is in accordance with theprovisions of section 197 ofthe Act.

Unique Document Identification Number (UDIN) for this document is20404644AAAADJ6126.

For: SPARK& Associates

Chartered Accountants FRN: 005313C

Pankaj Kumar Gupta

Partner

Membership No. 404644 Date: 31.07.2020 Indore

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

The annexure referred to the Independent Auditors' Report to themembers of the company on the financial statements for the year

ended 31st March 2020 we report that:

i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of its fixed

assets.

(b) The Company does not have a regular program of physicalverification of its fixed assets however certain fixed assets were verified during theyear and no material discrepancies were noticed on such verification. In our opinion thisperiodicity of physical verification is not reasonable having regard to the size of theCompany and the nature of its assets.

(c) The Company does not have any immovable property under Fixed Assethead.

ii. As explained to us the physical verification of certain inventoryhas been conducted at reasonable intervals by the management and no material discrepancieswere notice on such verification. As explained by the management that the company isinvolved in construction activities and there are so many items spread out at the site soit is very difficult to maintain the quantitative records of each and every item.

iii. The Company has not granted any investments in given anyguarantee or security or granted any loans or advances which are characterized as loansunsecured or secured to LLPs firms or companies or any other person .Thus paragraph3(iii)(a)(b) and (c) of the Order is not applicable to the Company and hence notcommented upon.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 oftheAct with respect to the loans and investments made;

v. According to information and explanations provided to us thecompany has not accepted any deposit from public as defined according to the provisions ofSection 73 to 76 of the Companies Act 2013 and the Rules framed there under. Hence weoffer no comments in respect of any contraventions thereto.

vi. According to the information and explanations provided to us theCompanies (Cost Accounting Record) Rules 2011 have been applicable to the companies forits construction operations. The Company has appointed Sushil Kumar Mantri &Associates Cost Accountant (FRN: 101049) to reviewed books of accounts maintained by thecompany and pursuant to the rules made by the Central Government for maintenance of CostRecords under sub section (I) of section 148 ofthe Act in respect of constructionactivity. The final audit report of the Independent Cost Auditor is not provided by thecompany hence we are not able to give any comment on cost records maintained by thecompany

vii. (a) According to the information and explanations given to us andon the basis of our examination of the records the Company has

been irregular in depositing undisputed statutory dues excluding GST.

(b) According to the information and explanations given to usundisputed amounts payable in respect of provident fund income tax sales tax servicetax duty of customs value added tax Goods and Service tax cess and other materialstatutory dues were in arrears as at 31st March 2020 for a period of more thansix months from the date they became payable.

S. No Type of Dues Period to which amount relates Amount
1 Provident Fund FY 2018-19 299326
FY 2019-20 158372
2 E.S.I.C FY 2017-18 99353
FY 2018-19 126785
FY 2019-20 24972
3 T.D.S FY 2017-18 2702683
FY 2018-19 1895619
FY 2019-20 1751119
4 Income Tax FY 2017-18 24444680

(c) The disputed statutory dues aggregating Rs. 30896740 that havenot been deposited on account of disputed matters pending before appropriate authoritiesare 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 INDORE SERVICE TAX

viii. Based on our audit procedure and according to the information andexplanations given to us we are of the opinion that the Company has defaulted inrepayment of loans / borrowings to the financial institutions banks Government ordebenture holders as per details given here-under:

S.No Particular of Bank/Financial Institution

Amount of Default

Period of Default (in Days)

Principal Interest
1 TATA CAPITAL 145619 638 395
2 ICICI BANK (CE-10) 507815 59725 605
3 ICICI BANK (CE -123) 2288730 259170 575
4 ICICI BANK (CE -45678) 2565024 297122 605
5 ICICI BANK (911) 850622 80161 665
6 ICICI BANK LTD (LOADER) 2518506 94782 485
7 ICICI BANK (DUMPER 1) 800657 0 395
8 ICICI BANK (TANDAM ROLLER) 1073197 118022 605
9 ICICI BANK (TANDAM ROLLER) 1410961 197185 815
10 HDFC BANK (FINE ROCK BRAKER) 570859 57791 665
11 HDFC BANK (MOTOR GRADER) 7588987 399908 635
12 HDFC BANK (POCLAIN - HYUNDAI) 2065270 209090 665
13 HDFC BANK (POCLAIN - KOMATSU) 2404762 243487 665
14 HDFC BANK (SOIL COMPACTOR) 4194353 424657 665
15 HDFC BANK (TEREX CRUSHER) 16739115 2509565 665
16 HDFC BANK (MAHINDRA DUMPER) 12271395 774645 665
17 HDFC BANK (NEW BOLERO) 814417 18472 575
18 HDFC BANK (POCLAIN-2) 4918636 331865 665
19 HDFC BANK (VSI-1000) 941663 70337 695
20 SREI FINANCE LTD 716000 0 75
TOTAL 65386588 6146622

ix.

The company has raised money by way of term loan and the same wasapplied for the purpose for which it has been raised. The company has not made any furtherpublic offering during the year.

x. According to the information and explanations given to us no fraudby the Company or on the company by its officers or employees

has been noticed or reported during the course of our audit.

xi. According to the information and explanation given to us and basedon our examination of the records of the Company the company

has paid/ provided for managerial remuneration in accordance with therequisite approvals by the provisions of section 197 read with Schedule V to the Act.

xii. In our Opinion and according to the information and explanationgiven to us the Company is not a Nidhi company.

xiii. According to our information and explanation given to us andbased on our examination of the records of the company transaction with the relatedparties are in compliance with section 177 and 188 of the Act where applicable and detailsof such transaction have been disclosed in the financial statement as required by theapplicable accounting standards.

xiv. According to information and explanation given to us and based onour examination of the records of the company the company has not made any preferenceallotment or private allotment of shares or fully or partly convertible debentures duringthe year.

xv. According to information and explanation given to us and based onour examination of the records the company has not entered into non-cash transaction withthe directors or persons connected with him. Accordingly paragraph 3 (xv) of the order isnot applicable.

xvi. The company is not required to be registered under section 45-IAofthe Reserve Bank of India Act 1934.

Unique Document Identification Number (UDIN) for this document is20404644AAAADJ6126.

For: SPARK& Associates

Chartered Accountants

FRN: 005313C

Pankaj Kumar Gupta

Partner

Membership No. 404644

Date: 31.07.2020 Indore

ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013

We have audited the internal financial controls over financialreporting of CMM INFRA PROJECTS LIMITED as at 31st March 2020 in conjunctionwith our audit of the financial statements of the company for the year ended on that day.

Management's Responsibility for Internal Financial Controls

The Company 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 ofreliable financial information asrequired by the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material 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 isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlover financial 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 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the 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 hasnot established its internal financial control over financial reporting on criteria basedon or considering the essential components of internal control stated in Guidance noteissued by Institute of Chartered Accountants of India.

Disclaimer of Opinion

Because of the significance of the matter described in the Basis ofDisclaimer of Opinion paragraph above we are unable to obtain sufficient appropriate auditevidence to provide a basis of our opinion whether company had adequate internal financialcontrol over financial reporting and whether such internal financial control was operatingeffectively as at 31st March 2020. Accordingly we don't express anopinion on the company internal financial control over financial reporting.

We have considered the disclaimer reported above in determining thenature timing and extent of audit test applied in our audit of financial statement ofcompany for the year ended 31st March 2020 and the disclaimer does not affectour opinion on the said financial statement of company.

For: SPARK& Associates

Chartered Accountants FRN: 005313C

Pankaj Kumar Gupta

Partner

Membership No. 404644

Date: 31.07.2020 Indore

.