To the Members of MADHAV INFRA PROJECTS LIMITED
1. REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying Standalone Financial Statements of MADHAV INFRAPROJECTS
LIMITED ("the company") which comprises the Balance Sheet as at March 312018 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information(hereinafter referred to as "Standalone Financial Statements").
2. MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Management and Board of Directors of the Company are responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these Standalone financial statements that give a true and fair view ofthe financial position financial performance including Other Comprehensive Income CashFlows and the Statement of Changes in Equity of the Company in accordance with accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; design implementation andmaintenance of adequate internal financial controls that are operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
3. AUDITORS' RESPONSIBILITY
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 thereunder. We conducted our audit ofthe Standalone Financial Statements in accordance with the Standards on Auditing specifiedunder section 143(10) of the Act. Those Standards require that we comply with the 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 operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company's management and Board of Directors aswell as evaluating 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.
4. BASIS FOR QUALIFIED OPINION
(a) Consequent to action under section 132 of the Income Tax Act in Madhav Group on09/11/2016 searches/surveys was carried out at various places. The searches resulted inseizure /impounding of documents.
Based on survey department issued notices for filling returns from the year 2010-2011to 2015-16 accordingly returns for the above year were filled. Subsequently the Companyhas filled application to Hon'ble Income Tax Settlement Commission disclosing additional /unaccounted income of Rs. 25.85 crores for the above years on which tax and interestliability is Rs. 5.64 cores ( after some adjustments ). The Hon'ble Income Tax SettlementCommission has admitted the application u/s 245D(1) of the Income Tax Act. The case ispending before Hon'ble Income Tax Settlement Commission.
Effect of the said disclosure and tax liability is not given in the books of accounts.
(b) The Company has not made disclosure of the required information as required by IndAS 11 ( Construction Contracts ) regarding Construction Contracts.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matters described on the basis for qualifiedopinion paragraph above the aforesaid 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;
(a) In the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2018;
(b) In the case of the Statement of Profit & Loss of the Profit for the yearincluding other Comprehensive Income ended on that date;
(c) In the case of the Cash Flow Statement of the Cash Flows for the year ended onthat date;
6. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of sub-section (11) of section 143 of the Actand on the basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in theAnnexure "A" a statement on the matters specified in the paragraph 3 and 4 ofthe said Order.
7. AS required by Section 143(3) of the Companies Act 2013 we further reportthat:
(a) We have sought and except for matters described in the basis for qualified opinionparagraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit.
(b) Except for the possible effects of the matters described in the basis for qualifiedopinion paragraph above in our opinion proper books of account as required by law havebeen kept by the company so far as appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
(d) Except for the possible effects of the matter described in the basis for qualifiedopinion paragraph in our opinion the balance sheet statement of profit and loss andcash flow statement comply with the Indian accounting standards specified under section133 of the act rule 7 of the companies (Account) Rules 2013 ;
(e) 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" and
(f) On the basis of written representations received from the Directors as on 31stMarch'2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March'2018 from being appointed as a director in termsof section 164 (2) of the act.
(g) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to the other matters to be included in theAuditor's Report in accordance with the Rule 11 of the Companies (Audit and Auditors)Rules 2014;
i. The Company has disclosed the impact of pending litigations which would impact itsfinancial position in the Financial Statement.
ii. The Company did not have any long-term contacts including derivative contracts assuch the question of commenting on any material foreseeable losses thereon does not arise.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For CHANDRAKANT & SEVANTILAL & J.K. SHAH & Co.
M. No.: 016642
ANNEXURE TO INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MADHAV INFRA PROJECTSLIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2018
(Referred to in paragraph 6 under the heading of "Report on other legal andregulatory requirements" of our report of even date)
1. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
b) Major portion of fixed assets has been physically verified during the year by themanagement in accordance with a program of verification which in our opinion providesfor physical verification of all the fixed assets at reasonable interval. No materialdiscrepancies were noticed on such physical verification.
c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
2. a) As explained to us the inventories were physically verified by the management atreasonable intervals during the year
b) As the Company has not maintained quantitative records of stock It is not possibleto find out discrepancies between the physical stock and book records.
3. The Company has granted interest free Unsecured Loan to the Companies covered in theregister maintained under section 189 of the Companies Act. 2013.
a) The terms and conditions of grant of such loan are not prejudicial to the company'sinterest except non charging of interest on the loan granted.
b) There is no stipulation for the repayment of principal amount and interest is notcharged on the loan. The principal amount outstanding is Rs.13069447 as on 31/03/18.
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 Act with respectto the loans and investments made and guarantees given except interest free loan to itsCompanies in which Director (s) of the Company is interested.
5. The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable to the Company.
6. As informed to us the Central Government has not prescribed the maintenance of costrecords under Section 148(1) of the Act for any of the product manufactured by theCompany.
7. a) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company amount deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax service tax duty of custom duty of excise value added tax cessand other material statutory dues have been generally regularly deposited during the yearby the Company with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of such statutory dueswere in arrears as at 31st March 2018 for a period of more than six months fromthe date they became payable.
b) According to information and explanation given to us details of disputed income taxdemands that have not been deposited on account of disputes are given below:
|Name of Statue ||Nature of Dues ||Amount ( INR) ||Period to which amount relates ||Forum where disputes pending |
| || || || ||Applied for rectification |
|Income Tax Act 1961 ||Income Tax ||16551000 ||A.Y. 2013 - 14 ||u/s 154 To The Assessing Officer. |
8. The Company has not defaulted in repayment of any loans or borrowings from anyfinancial institution banks government or debenture holders during the year.Accordingly provision of Clause 3(viii) of the Companies (Auditor's Report) order 2016is not applicable to the Company.
9. The Company has not raised money by way of further public offer (including debtinstruments) and money raised by way of term loan were applied for the purposes for whichthey were raised..
10. According to the information and explanation given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
11. According to the information and explanation given to us and based on ourexamination of the records of the Company remuneration has been paid to the Managerialpersons in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act 2013.
12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly provision of Clause 3(xii) of the Companies(Auditor's Report) order 2016 is not applicable to the Company.
13. According to the information and explanation given to us and based on ourexamination of the records of the Company transaction with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
14. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made preferential allotmentduring the year.
15. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered in to non-cashtransactions with directors or persons connected with him. Accordingly provision ofClause 3(xv) of the Companies (Auditor's Report) order 2016 is not applicable to theCompany.
16. The Company is not required to be registered under Section 45 IA of theReserve Bank of India Act 1934.
|For CHANDRAKANT & SEVANTILAL & J.K. SHAH & Co. |
|CHARTERED ACCOUNTANTS |
|FRN: 101676W |
| ||H.B. SHAH |
|M. No.: 016642 |
| ||PARTNER |
|Place: VADODARA |
|Date: ||14/08/2018 |
ANNEXURE-B TO THE 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 controls over financial reporting of MADHAVINFRA PROJECTS LIMITED ("the Company") as of March 31 2018 in conjunctionwith our audit of the financial statements 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 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 the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 March 31 2018 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 Institute of CharteredAccountants of India
For CHANDRAKANT & SEVANTILAL & J.K. SHAH & Co.
M. No.: 016642