Independent Auditor's Report on Standalone Financial Statement
To the Members of
Diamant Infrastructure Ltd.
Report on the Financial Statements
We have audited the accompanying (Standalone) financial statements of M/s DiamantInfrastructure Ltd. Which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss Cash Flow Statement for the year then ended and a summaryof 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 with respect to the preparation of these (Standalone)financial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 misstatement whether due to fraud orerror.
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 there under.
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 audit evidence about the amounts andthe 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 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation 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.
During the Company has a 33.33% stake in M/s Ginger Infrastructure Pvt. Ltd. this is aassociate company of M/s Diamant Infrastructure Ltd. as per the Accounting Standard- 23Accounting for Associate in consolidated Financial Statement but as per Sec 129 of thecompanies Act 2013 definition of Subsidiary also includes the Associate and JointVenture hence the Books of M/s Ginger Infrastructure Pvt. Ltd. has been considered forthe purpose of consolidation as per equity method as mentioned in the accountingstandards-23.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid (Standalone) financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its Profit/Loss and its Cash Flow for the year ended on thatdate.
During the current year company has given 3 additional Flats as collateral security onbehalf of loan obtained by M/s Ginger Infrastructure Pvt. Ltd. from Andhra Bank. Thecompany has violated Sec 185 and 186 of companies Act 2013 and as explained in clause 4of the Annexure A to the Independent Auditors Report.
The company has not appointed any full time company secretary as required by thecompanies Act 2013. There are also certain advances made by the company which areoutstanding during the whole year and no amount has been recovered with respect to thesame. The amount of advances which are outstanding amounted to Rs. 40000000/-.
During the Current Financial year the company has disposed off its substantial fixedasset which are compulsorily required for running the infrastructure business of thecompany and also in the current year company has terminated all its employees from theemployment on the basis of this information and also company is incurring huge lossescontinuously from last 3 years hence in our opinion this might affect the going concernconcept of the company in the near future. But on the basis of written representationreceived from the Management we have been informed that this is temporary in nature and inthe near future they will carry on the business effectively.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 as amended issued bythe Central
Government of India in terms of sub-section (11) of section 143 of the Act we give inthe
"Annexure A" a statement on the matters specified in paragraphs3 and 4 of the Order.
2. As required by section 143 (3) of the Act we report that:
a. we have sought and obtained all the information and explanations which to the bestof 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 been kept by theCompany so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d. in our opinion the aforesaid (Standalone) financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e. On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 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
The going concern matter as describe Emphasis of matter paragraph in the main auditreport might have impact on the functionality of the company in the near future.
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 litigations on its financialposition in its financial
statements Refer Annexure A (Point 7) and Note 23.1 to the Independent Audit Report;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The company has provided requisite disclosure in its standalone financial statementas to holding as well as dealing in specified bank notes during the period from 8 ofNovember 2016 to 30 of December 2016 and these are in accordance with the books ofaccounts maintained by the company. Refer Note 23.18 to the standalone financialstatement.
For and on behalf of
Pilla Mathur Manuja & Co.
FRN No:- 124471W
Thakur J. Manuja
Membership number:- 113940
"Annexure A" to the Independent Auditors' Report
Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the financial statements of the Company for theyear ended March 31 2017:
1) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and no material discrepancies between the booksrecords and the physical fixed assets have been noticed.
(c) The title deeds of immovable properties are held in the name of the company.
(d) And also in the current financial year the company has disposed of its substantialFixed asset and as per our opinion this is substantial for running the business ofInfrastructure business of the company and this might affect the going concern concept ofthe company but as per the explanation given and written representation obtained from themanagement we have been informed that this is temporary in nature and will not affect thegoing concern.
2) (a) The management has conducted the physical verification of inventory atreasonable intervals. (b) The discrepancies noticed on physical verification of theinventory as compared to books records which has been properly dealt with in the books ofaccount were not material.
3) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (C) of theOrder are not applicable to the Company and hence not commented upon.
4 ) In our opinion and according to the information and explanations given to usthe company has complied with the provisions of section 185 and I86 of the Companies Act2013 In respect of loans investments guarantees and security except flats of DabhaNagpur which is Held as Inventory the company and the same is given as additional securityto the bank on behalf of loan obtained by M/s Ginger Infrastructure Pvt. Ltd. and the oldguarantee given to the bank when M/s Ginger Infrastructure Pvt. Ltd. is a subsidiary thesame guarantee has also been continued during the current financial year.
5) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
6) As per Sec 148 of the companies Act 2013 and Companies ( Cost records and Audit)Rules 2014 Since the company does not fall in any of the criteria as mentioned in note23.17 to the Independent Audit Report hence the company has not maintained the CostRecords and also not conducted the Cost Audit as required by the Companies Act 2013.
7) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has not been generallyregular in depositing undisputed statutory dues including Sales tax Service Tax Valueadded Tax Provident Fund Employees State Insurance Income-Tax Duty of Customs Duty ofExcise Cess and any other statutory dues with the appropriate authorities. According tothe information and explanations given to us and according to the our finding there arecertain undisputed amounts payable in respect of the above and were in arrears as at March31 2017 for a period of more than six months from the date on when they become payablethe details of which is explained below:
|Sr. No. ||Authorities which amount due ||Period to which it relates ||Amount |
|1 ||Income Tax ( TDS on Interest) ||June-16 and Aug-16 ||10724.00/- |
|2 ||Income Tax ( TDS on Professional) ||April-16 To Sept-16. ||74000.00/- |
|3 ||Income Tax ( TDS on Contract ||Sept-16. ||360.00/- |
| || || ||85084.00/- |
During the current Financial year the company has not filled its TDS return for the 3quarter.
And also company is not regular in payment of its contribution towards provident Fundand Employee State Insurance Corporation. b)According to the information and explanationgiven to us there are certain outstanding dues on account of any dispute as given thefollowing:
|Nature of Statute ||Nature of Due ||Rupees ||Period to which it relates ||Forum where dispute is pending |
|Chhattisgarh Sales Tax ||Penalty for short payment of sales tax on purchase of fixed Asset ||1150000/- ||F.Y. 2008-09 ||Appellant Tribunal of sales tax Durg Chhattigardh. |
|Nagpur Local Body tax ||Payment of tax on Sales ||2158251/- ||F.Y. 2013-14 ||High Court |
|Income tax ||Payment of Tax and Interest ||9074721/- ||F.Y. 2007-08 ||Income tax Appellate Tribunal |
8) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks and financial institutionexcept the payment to Srei Equipment Finance Pvt. Ltd. the repayment of which is notregular but the loan has been repaid in full before the year end. The company has alsoobtained a Car loan from Union Bank of India the repayment of which is not regular and notpaid as per repayment schedule.
The Company has also obtained a term loan from Pusad Urban Co-Op Bank Ltd. therepayment of the same is not regular at the starting of the current financial year due tosome dispute in between the bank and the company regarding rate of interest charged by thebank. The company has not paid any EMI consistently for 4 month (i.e. from May 2016 to Aug2016).
9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10)Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
12)In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in the note22 Financial Statements as required by the applicable accounting standards.
13)Based upon the audit procedures performed and the information and explanations givenby the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon. 14)Based upon the audit procedures performed andthe information and explanations given by the management the company has not entered intoany non-cash transactions with directors or persons connected with him. Accordingly theprovisions of clause 3 (xv) of the Order are not applicable to the Company and hence notcommented upon.
15)In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.
For and on behalf of
Pilla Mathur Manuja & Co.
FRN No:- 124471W
Thakur J. Manuja
Membership number:- 113940
"Annexure B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Diamant Infrastructure Ltd.
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 DiamantInfrastructure Ltd. as of March 31 2017 in relation with our audit of the standalonefinancial 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 responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under 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 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 controls systemover financial reporting.
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
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.
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 2017.
For and on behalf of
Pilla Mathur Manuja & Co.
FRN No:- 124471W
Thakur J. Manuja
Membership number:- 113940