ON STANDALONE FINANCIAL STATEMENT
The Members of
Diamant Infrastructure Ltd.
Report on audit of Financial Statements
We have audited the accompanying Ind-AS financial statements of M/s DiamantInfrastructure Ltd. which comprise the Balance Sheet as at March 31 2021 the Statementof Profit and Loss including the statement of Other Comprehensive Income the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ('Act') in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 its profit (or Loss)* and cash flows for theyear ended on that date.
Basis for opinion
We conducted our audit in accordance with the standards on auditing specified undersection 143 (10) of the Companies Act 2013. Our responsibilities under those Standardsare further described in the auditor's responsibilities for the audit of the financialstatements section of our report. We are independent of the Company in accordance with thecode of ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the code of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Material Uncertainty Related to Going Concern
There is no major business transaction in the company and there is no employee employedfor the operation of the same on the basis of this information in our opinion this mightaffect the going concern concept of the company in the near future. But on the basis ofwritten representation received from the Management we have been informed that thesituation is temporary in nature and in the near future they will carry on the businesseffectively
The above factors cast a significant uncertainty on the Company's ability to continueas a going concern. Pending the resolution of the above uncertainties the Company hasprepared the aforesaid statement on a going concern basis.
Key audit matters
Key audit matters are those matters that in our professional judgment 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 such matter arose during the audit of current period except the fact thatthe loan which has been classified as NPA for which companies premises has been given ascollateral security the possession of that premises has been taken by the bank and thecompany has vacated that property and shifted to the new place.
Information other than the financial statements and auditors' 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 Board'sReport including Annexures to Board's Report Business Responsibility Report but does notinclude the financial statements and our auditor's report 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 standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that if 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 the financial statements
The Company's board of directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the accounting standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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 statement that give a true and fair viewand are free from material misstatement whether due to fraud or 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 boards of directors are also responsible for overseeing the Company's financialreporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits 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" a statement on the matters specified inparagraphs 3 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 Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 asamended;
(e) On the basis of written representations received from the directors as on March 312021 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of section 164 (2) ofthe Act;
(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" to this report;
(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 as amended inour opinion and to the best of our information and according to the explanations given tous:
1. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements - Refer Note 24 to the Ind AS financialstatements;
2. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
3. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
"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 2021:
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 the management during the year has physically verifieda portion of the fixed asset and no material discrepancies between the books records andthe 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 earlier years the company has disposed of its major fixed assetinour opinion this is substantial for running the business of Infrastructure segment of thecompany.
2) (a) The management has conducted the physical verification of inventory atreasonable intervals.
(b)The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial. Further the stock in hand is not under insurance cover
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 us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in respect of loans investments guarantees and security except flats of Dhaba whichwere given as additional security to the bank on behalf of loan obtained by M/s GingerInfrastructure Pvt. Ltd. and the old guarantee given to the bank when M/s GingerInfrastructure Pvt. Ltd. was a subsidiary at the time of obtaining the loan and from theclosing of the previous Financial year M/s Ginger Infrastructure Pvt. Ltd. is neither asubsidiary nor the Associate of M/s Diamant Infrastructure Ltd. and the same guarantee hasalso been continued.
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 the company is not required to maintain the cost records as required by theCompanies 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 during the current financial year amajor liability has arised to the Company to deposit undisputed statutory dues includingSales tax Service Tax Value added Tax Provident Fund Employees State InsuranceIncome-Tax Duty of Customs Duty of Excise Cess and any other statutory dues with theappropriate authorities. According to the information and explanations given to us andaccording to our finding no such undisputed amounts were in arrears as at March 31 2021for a period of more than six months from the date on when they become payable.
b)According to the information and explanation given to us there are certainoutstanding dues on account of any disputes as follows:
|Nature of Statute ||Nature of Due ||Rs. ||Period to which it relates ||Forum where dispute is pending |
|Nagpur Local Body tax ||Payment of tax on Sales ||2158251/- ||F.Y. 201314 ||High Court |
|Income tax ||Payment of Tax and Interest ||9074721/- ||F.Y. 200708 ||Income tax Appellate Tribunal |
|Sales tax appeal ||AY 2013-14 sales tax appeal ||414000/- ||FY 2012-13 ||Deputy Commissioner of Sales tax |
8) In our opinion and according to the information and explanations given to us theCompany has defaulted in the repayment of following dues to banks and financialinstitution:
Union Bank of India Dharampeth Branch Nagpur.
|Sr No Type of Facilities ||Amount Sanctioned ||Current outstanding |
|1. Cash Credit ||80000000/- ||82971931/- |
|2. Car Loan ||1125000/- ||605315/- |
|3. Temporary Overdraft ||No basis found ||4398354/- |
SREI Equipment Finance Ltd. Nagpur.
|Sr No Type of Facilities ||Amount Sanctioned ||Current outstanding |
|1. Unsecured Loan ||23436000/- ||23436000/- |
All the above mentioned facilities has been classified as NPA by the bank and as thebank has not debited the Interest in the company's account therefore the company hasprovided interest as expense after the classification of loan as NPA.
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 explanationsgiven by 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) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not paid managerial remuneration to any of thedirectors which is in accordance with sec 197 & Schedule V of companies Act 2013.
12) 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.
13) 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 theFinancial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanationsgiven by 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.
15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
16) 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.