To the Members of Infra Industries Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Infra Industries Limited("the Company")which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provision of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofthe appropriate accounting policies; making judgements and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and fair presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompanys preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Companys Directors as well as evaluatingthe 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.
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 and its Profit and its cash flows for the year ended on that date.
Emphasis of Matter
The appropriateness of the going concern assumption is dependent on the Companysability to improve operating efficiency by exploring various options to raise additionalfinance as well as disposal of surplus immovable properties to meet its short term andlong term obligations. Based on the mitigating factors discussed in the note no. 24management believes that the going concern assumption is appropriate.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure "A" a statement on the mattersspecified in paragraphs 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 purposes 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. The matter described in the Emphasis of Matter paragraph above in our opinion mayhave an adverse effect on the functioning of the Company.
d. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account.
e. In our opinion the aforesaid financial statements comply with the accountingstandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
f. On the basis of written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of section164(2) of the Act.
g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
h. With respect to the other matters to be included in the Auditors Report inaccordance with Rules 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 does not have any pending litigations which would impact on itsfinancial position.
ii. The Company did not have any long term contracts including derivative contractsthat require provision under any law or accounting standards for which there were anymaterial foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year.
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from November 82016 to December 30 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management as referred to in Note27 to the financial statements
For Chaturvedi& Shah
Firm Registration No. 101720W
Membership No. 102749
Dated: 29th May 2017
Annexure "A" to the Independent Auditors Report on the FinancialStatements of Infra Industries Limited. (Referred to in Paragraph 1 under the heading of"Report on other legal and regulatory requirements" of our report of even date)
i) In respect of its Fixed Assets :
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets on the basis of available information.
b. As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.
c. According to the information and explanations given to us the immovable propertiesof the Company have been mortgaged with the lenders and the original title deeds aredeposited with the lenders. Based on the verification of the copies of the titledeeds in respect of immovable properties of free hold land and building that have beendisclosed as fixed assets in the financial statement are held in the Companys nameas at balance sheet date.
ii) In respect of its inventories:
As explained to us physical verification of inventories have been conducted atreasonable intervals by the management which in our opinion is reasonable having regardto the size of the Company and nature of its inventories. No material discrepanciesnoticed on such verification of inventories as compared to the book records.
iii) 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. Consequently the requirement of clause (iii) (a) to clause (iii)(c) of paragraph 3 of the Order is not applicable to the Company.
iv) The Company has not made any investments or given any loans guarantees or securityduring the year. Consequently the requirement of clause (iv) of paragraph 3 of the Orderis not applicable to the Company.
v) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of provisions of sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed thereunder. Therefore the provisionsof Clause (v) of paragraph 3 of the Order are not applicable to the Company.
vi) To the best of our knowledge and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub section (1) of Section 148 ofthe Act in respect of the activities undertaken by the Company.
vii) In respect of Statutory dues :
a. According to the records of the Company undisputed statutory dues includingProvident Fund Income-Tax Sales-Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax Cess and any other statutory dues applicable to it have not regularly beendeposited with appropriate authorities. According to the information and explanationsgiven to us no undisputed amounts payable in respect of the aforesaid dues wereoutstanding as at March 31 2017 for a period of more than six months from the date ofbecoming payable except for VAT/Sales Tax of Rs. 155727/- TDS of Rs. 502475/- andSales Tax Deferral loan of Rs. 3459737/- all total aggregating to Rs. 4117939/-.
b. According to the information and explanations given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added tax cess on account of any dispute which have not been deposited.
viii) The Company has not raised any loan from government or by way of issue ofdebentures. Further based on our audit procedures information and explanations given bythe management we are of the opinion that there were default in repayment of loan takenfrom a NBFC which is given as under:
|Particulars Name of the Lenders ||Amount of default as at the balance sheet date ||Period of Remarks If default any |
|Religare Finvest Limited ||394513 ||1 to 58 days |
ix) The company has not raised money by way of initial public offer or further publicoffer (including debt instruments) or term Loan during the year and hence clause (ix) ofparagraph 3 of the Order is not applicable to the Company.
x) Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per information and explanations given to usno fraud by the Company or on the Company by its officers or employees has been noticed orreported during the year.
xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
xii) In our opinion company is not a nidhi company. Therefore the provisions of clause(xii) of paragraph 3 of the Order are not applicable to the company.
xiii) In our opinion and according to the information and explanations given to us alltransactions with related parties are in compliance with sections 177 and 188 of the Actand their details have been disclosed in the financial statements etc. as required by theapplicable accounting standards.
xiv) In our opinion and according to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year and hence clause (xiv) of paragraph 3 of theOrder is not applicable to the company.
xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transaction with the directors or personsconnected with him and covered under section 192 of the Act. Hence clause (xv) of theparagraph 3 of the Order is not applicable to the Company.
xvi) To the best of our knowledge and as explained the Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act 1934.
For Chaturvedi& Shah
Firm Registration No. 101720W
Membership No. 102749
Dated: 29th May 2017
Annexure B to the Independent Auditors Report
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 Control over financial reporting of InfraIndustries Limited ("the company") as of 31st March 2017 in conjunction withour audit of the standalone financial statements of the Company for the year then ended.
Management Responsibility for the Internal Financial Controls
The Companys 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 (ICAI). 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 companys policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
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 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 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 auditors judgment 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 Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a 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.
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.
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 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.
For Chaturvedi& Shah
Firm Registration No. 101720W
Membership No. 102749
Dated: 29th May 2017