The Members of Jog Engineering Limited:
Report On the Financial Statement
We have audited the attached Balance Sheet of Jog Engineering Limited as at 31stMarch 2016 and also Profit and Loss Statement and Cash Flow statement of the Company forthe year ended on that date and a summary of the significant accounting policies and otherexplanatory information. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these financialstatements based on our audit.
Managements Responsibility for the Financial Statement
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 provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the standard on auditing issued by theInstitute of chartered Accountants of India. Those Standards required that we comply withethical requirements and plan and performs the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
We conduced our audit in accordance with the Standards on Auditing spectified 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 misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosure in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risk of material misstatement ofthe financial statement whether due to fraud or error. In making those risk assessmentthe auditor consider internal control relevant to the companys preparation and fairpresentation of the financial statement in order to design audit procedure that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting polices used and reasonableness of the accounting estimates made by managementas well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
a) Attention is invited to the following notes:
i) Note of financial statement no. 2.1 regarding non-provision of interest payableon deposits from public on period after maturity which are matured but not paid ofamount Rs. 222.43 Lac.
ii) Note of financial statement no. 13 regarding diminution in value of long termequity investment in Mahakali Flyover Company Limited having value Rs. 69.97 Lac.
b) We are unable to express an opinion on the treatment required to be given to thefollowing items and on the ultimate recoverability of the under-mentioned debts / advances/claims.
i) Note of financial statement No. 15 regarding long term trade receivables outstandingfor more than five years: Claims aggregating to Rs. 5328.11 Lac (out of which Rs.3991.30 Lac receivable from subsidiary Company) taken as income in earlier yearsconsidered by the Management as good and recoverable in respect of which the ultimateshortfall in recovery if any is not presently quantifiable.
ii) Note of financial statement No. 14 regarding Loans and advances given to relatedparties claims aggregating to Rs. 711.45 Lac considered by the Management as good andrecoverable in respect of which the ultimate shortfall in recovery if any is notpresently quantifiable.
iii) Note of financial statement No. 14 regarding deposits and advances with other thanrelated parties claims aggregating to Rs. 366.13 Lac considered by the Management asgood and recoverable in respect of which the ultimate shortfall in recovery if any isnot presently quantifiable.
So the effects of above on profit and loss of Company cannot be ascertained.
c) In our opinion the company do not have going concern status for reasons stated innote no. 3 of financials statement. However as per the managements view thecompany has business prospects as stated in note no. 3 and accounts has been drawn on thebasis of going concern assumption.
We are unable to determine financial impact due to adjustment that may have to be madeto the value of assets and liabilities in case such assumption of going concern basis isvitiated in any manner.
d) Without considering the matters referred para "b" and "c" abovethe effect of which could not be determined and where we are unable to express an opinionfor the reasons stated in that paragraph had the observations made by us in para "a(i) and (ii)" above been considered there would be a loss of Rs. 987.80 Lac for theyear ended 31st March 2016 (as against the reported figure of loss of Rs.701.10 Lac) Reserve & surplus Account (Debit balance being accumulated loss) wouldhave been Rs. 5710.48 Lac (as against the reported figure of Rs. 6133.55 Lac).
Subject to our comments above the financial statement give the information required bythe act in the manner so required and give a true and fair view in conformity with theaccounting principle generally accepted in India:
a) in the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2016;
b) in the case of the Profit & Loss Statement of the loss for the year ended onthat date;
c) in the case of Cash Flow Statement of the cash flows for the year ended on thatdate.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 (theOrder) issued by the Central Government in terms of Section 143(11) of the Act wegive in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 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 subject to:
1. Note of financial statement no. 22 regarding recognition of certain claims asrevenue in earlier years without evidence of final acceptability of the claims aggregatingto Rs. 595.18 Lac (forming part of Debtors) which is not in accordance with AccountingStandard 7- "Accounting for construction contracts"
2. Note to Financial Statement no.16 regarding valuation of inventory aggregatingRs. 262.71 Lac of which net realizable value can not be ascertained which is not inaccordance with Accounting Standard 2- "Valuation of inventory".
3. Note of financial statement no. 13 regarding valuation of non-current investmentin subsidiary Company Mahakali Flyover Co. Ltd aggregating to Rs. 69.97 Lac which is notin accordance with Accounting Standard -13 "Accounting for investment".
The Balance Sheet Profit & Loss Statement and Cash Flow Statement dealt with bythis report comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.
(e ) The Directors are disqualified as on 31st March 2016 from beingappointed as a Director in term of section 164(2) of the Act.
(f) In respect to the adequacy of the internal financial control over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in Annexure "B"
(g) W ith respect to the other matters to be included in the Auditors 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 as referred to in Note 24 to the financialstatements.
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.
FOR S. H. AMDEKAR & COMPANY
S. H. AMDEKAR
Membership No. 37978
Pune 31st August 2016
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements section of our report of even date)
(1) The company is maintaining proper records to show full particulars includingquantitative details and situation on Fixed Assets. The physical verification of fixedassets has been carried out at reasonable intervals by the management during the year andno material discrepancies were noticed on such verification. None of the Fixed Assets hasbeen revalued during the year.
(2) (a) The Inventory of construction material consumables stores and spare partsat the Companys one site having value Rs. 11.51 Lac for which criminal proceeding isin court of law. Pursuant to termination of a contract Stocks having value of Rs. 251.20Lac at the other site have been taken over by the Client of that site which is a Companyfully owned by the Government of Maharashtra and valuation thereof is as at the time oftaking over by the Client. The matter in respect of termination and its after-effectsincluding settlement of accounts is subjudice in the Honble Bombay High Court. Thenet realizable value of this inventory cannot be ascertained.
(b) The stock at sites cannot be verify by management due facts narrated above.
(c) The Company is maintaining proper records of Inventory.
(3) (a) As per the information and explanation given to us and the records produced tous for verification the Company has made payment in previous period on behalf of / paidadvances to the companies firm and other parties covered under register maintained undersection 189 of the Act as following:
(i) Mahakali Flyover Company Ltd. (a subsidiary the Company) Rs. 550.00 Lac: Pursuantto encashing by the PWD-GoM a Bank Guarantee of equal amount issued by the CompanysBank for a contract that was assigned to this subsidiary:
(ii) Mr. P. P. Sheth (Director of the Company) Rs. 121.45 Lac
(iii) M&P Associates (Partnership firm in which directors are Partners): Rs. 40Lac for purchase of a flat admeasuring 900 square feet in Dadar Mumbai for a totalconsideration of Rs. 45 Lac.
(b) According to the information and explanations given to us we are of the opinionthat the rate of interest and conditions of such loans given by the Company is prima facieprejudicial to the interest of the Company as no interest is charged on such loans.
(c) We are unable to comment on regularity of repayment of principal amount because theterms of repayment have not been stipulated.
(d) As per the information and explanations given to us efforts are being made forrecovery of amount outstanding as considered appropriate by the management.
(4) The company has not made any fresh loans and investment during the year so clause3(iv) of the order is not applicable to the company.
(5) The company has not accepted deposit during the year. However following is statusof the public deposit accepted previously and not paid
(a) The Company has defaulted w.e.f. 1st October 2002 onwards in repaymentof deposits matured and claimed and the outstanding amount of such unpaid matured depositsand interest thereon upto the date of maturity as on 31st March 2016 is Rs.126.60 Lac (P/Y Rs. 126.60 Lac).
(b) Appropriate intimation of default was sent to the Company Law Board Mumbai fromtime to time in respect of each month since default.
(c) The Company had filed an application under section 58A of old Company Act 1956 toCentral Government for granting extension of repayment of deposits. The Company Law Boardvide its order dated 14th June 2010 has allowed the Company to repay theoverdue and matured deposits upto 31st March 2011. But the Company has madedefault in payment as per order.
(6) The provisions of clause 3 (vi) of the Order are not applicable to the Company asthe respective entities are not covered by the Companies (Cost Records and Audit) Rules2014.
(7) a. . According to the records of the Company undisputed statutory duesincluding Income Tax Sales Tax Fringe Benefit Tax and other statutory dues have not beenregularly deposited with the appropriate authorities. Provident Fund and ESI dues havegenerally been regularly deposited with the appropriate authorities during the year. Therewere no payments in respect of Customs Duty/ Excise Duty/ Service Tax during the year. Basedon the audit procedure and according to the information and explanation given to us theextent of arrears of outstanding statutory dues as at the end of the year for a period ofmore than 6 months from the date they became payable are as under in Rs. Lac:
|Nature of Dues || |
As on 31/03/2016 (Rs. In lac)
|Income Tax / TDS || |
|Sales Tax || |
|Works Contract Tax || |
|Fringe Benefit Tax || |
b. According to the information and explanations given to us and the records of theCompany the dues of Income Tax which have not been deposited on account of any disputeare as follows in Rs. Lac:
|Nature of Dues || |
| || |
(Rs. In Lac)
|Forum where pending |
|Income Tax A.Y. 2008-09 || |
|Commissioner of Income tax |
|Income Tax A.Y. 2003-04 || |
|Income Tax A.Y. 2005-06 || |
(8) Based on our audit procedures and according to the information and explanationsgiven to us the Company has defaulted in repayment of dues to financial institutionsbanks and amount of default is as stated hereunder in Rs. Lac
|No. Name of the Bank / Financial Institution || |
Amount of default as on 31.03.2016
| || |
(As per books of accounts)
|1 Bank of Maharashtra || |
|2 Andhra Bank || |
|3 Development Credit Bank Ltd / ARCIL || |
|4 IDBI Bank || |
|Total (Refer Note No.6 of financial statement) || |
(9) The company did not raise any money by initial public offer (including debtinstrument) and term loans during the year. Accordingly para 3(ix) of the order is notapplicable to the company.
(10) Based upon the audit procedures performed and according to the information andexplanations given and representations made by the management we report that no fraud onor by the Company has been noticed or reported during the year nor have we been informedof such case by the management.
(11) According to information and explanation given to us and based on the examinationof record the company has paid / provided for managerial remuneration in accordance withrequisite and approval mandated by the provision of the section 197 read with schedule Vof the act.
(12) The company is not nidhi company so accordingly provisions of clause 3 (xii) ofthe Order are not applicable to the Company
(13) According to information and explanation given to us and based on the examinationof record transaction with related party are in compliance with section 177 and 188 anddetails have been disclosed in financial statement as required by applicable accountingstandard.
(14) According to information and explanation given to us and based on the examinationof record the company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review
(15) According to information and explanation given to us and based on the examinationof record the company has not entered into any non- cash transactions with directors orpersons connected with him
(16) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934
FOR S. H. AMDEKAR & COMPANY
S. H. AMDEKAR
Membership No. 37978
Pune 31st August 2016