To the Members of Supreme Infrastructure India Limited
REPORT ON THE AUDIT OF STANDALONE FINANCIAL
1. We have audited the accompanying standalone financial statements of SupremeInfrastructure India Limited ('the Company') which comprise the Balance Sheet as at 31March 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 ('Act') in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India including Indian Accounting Standards ('Ind AS') specified under section133 of the Act of the state of affairs (financial position) of the Company as at 31 March2020 and its loss (financial performance including other comprehensive income) its cashflows and the changes in equity for the year ended on that date.
Basis for Qualified Opinion
3. As stated in Note 11.3 to the accompanying standalone financial statement theCompany's current financial assets as at 31 March 2020 include trade receivablesaggregating H45680.90 lakhs (31 March 2019: H45680.90 lakhs) in respect of projectswhich were closed/substantially closed and where the receivables have been outstanding fora substantial period. Management has assessed that no adjustments are required to thecarrying value of the aforesaid balances which is not in accordance with the requirementsof Ind AS 109 'Financial Instruments'. Consequently in the absence of sufficientappropriate evidence to support the management's contention of recoverability of thesebalances we are unable to comment upon the adjustments if any that are required to thecarrying value of the aforesaid balances and consequential impact if any on theaccompanying standalone financial statement. Our opinion on the standalone financialstatement for the year ended 31 March 2019 was also modified in respect of this matter.
4. As stated in Note 18.2 to the accompanying standalone financial statements theCompany's non-current borrowings short-term borrowings and other current financialliabilities as at 31 March 2019 include balances aggregating Nil (31 March 2018: H9324.24lakhs) Nil (31 March 2018: H294.21 lakhs) and HI 1925.03 lakhs (31 March 2018:H11510.27 lakhs) respectively in respect of which confirmations/statements from therespective lenders have not been received. These borrowings have been classified intocurrent and non-current basis the original maturity terms stated in the agreements whichis not in accordance with the terms of the agreements in the event of defaults inrepayment of borrowings. Further whilst we have been able to perform alternate procedureswith respect to certain balances in the absence of confirmations/ statements from thelenders we are unable to comment on the adjustments if any that may be required to thecarrying value of these balances on account of changes if any to the terms andconditions of the transactions and consequential impact on the accompanying standalonefinancial statements. Our audit opinion on the standalone financial statements for theyear ended 31 March 2018 was also modified in respect of this matter. (TO BE DELETED ASTHE QUALIFICATION IS REMOVED)
5. As stated in Note 4.4 to the accompanying standalone financial statements theCompany's non-current investments as at 31 March 2020 include non-current investments inone of its subsidiary aggregating H142556.83 lakhs. The subsidiary has significantaccumulated losses and its consolidated net-worth is fully eroded. Further the subsidiaryis facing liquidity constraints due to which it may not be able to realise projections asper the approved business plans. Based on the valuation report of an independent valuer asat 31 March 2019 and other factors described in the aforementioned note Management hasconsidered such balance as fully recoverable Management has assessed that no adjustmentsare required to the carrying value of the aforesaid balances which is not in accordancewith the requirements of Ind AS 109 'Financial Instruments'. In the absence of sufficientappropriate evidence to support the management's assessment as above and other relevantalternate evidence we are unable to comment upon adjustments if any that may berequired to the carrying values of these non-current investments and aforementioned duesand the consequential impact on the accompanying standalone financial statements.
6. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ('ICAI') together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.
Material Uncertainty Related to Going Concern
7. We draw attention to Note 37 to the accompanying standalone financial statementswhich indicates that the Company has incurred a net loss of H49100.25 lakhs during theyear ended 31 March 2020 and as of that date; the Company's accumulated losses amounts toH177690.20 lakhs which have resulted in a full erosion of net worth of the Company and itscurrent liabilities exceeded its current assets by H323242.74 lakhs. Further asdisclosed in Note 37 to the said financial statements there have been delays in repaymentof principal and interest in respect of borrowings during the current year. The abovefactors along with other matters as set forth in the aforesaid note indicate that amaterial uncertainty exists that may cast significant doubt on the Company's ability tocontinue as a going concern. However based on ongoing discussion with the lenders forrestructuring of the loans revised business plans equity infusion by the promoters andother mitigating factors mentioned in the aforementioned note Management is of the viewthat going concern basis of accounting is appropriate.
The above assessment of the Company's ability to continue as going concern is by itsnature considered as a key audit matter in accordance with SA 701. In relation to theabove key audit matter our audit work included but was not limited to the followingprocedures:
i. Obtained an understanding of the management's process for identifying all events orconditions that may cast significant doubt over the company's ability to continue as agoing concern and a process to assess the corresponding mitigating factors existingagainst each such event or condition. Also obtained an understanding around themethodology adopted by the Company to assess their future business performance includingthe preparation of a cash flow forecast for the business.
ii. Evaluated the design and tested the operating effectiveness of key controls aroundaforesaid identification of events or conditions and mitigating factors and controlsaround cash flow projections prepared by the management.
iii. We obtained from the management its projected cash flows for the next twelvemonths basis their future business plans and considering the impacts of implementation ofTariff Order 2017. Reconciled the cash flow forecast to the future business plan of theCompany as approved by the Board of Directors
iv. Assessed the methodology used by the management to estimate the cash flowprojections including the appropriateness of the key assumptions in the cash flowprojections for next 12 months by considering our understanding of the business pastperformance of the Company external data and market conditions apart from discussingthese assumptions with the management and the Audit Committee;
v. Tested mathematical accuracy of the projections and applied independent sensitivityanalysis to the key assumptions mentioned above to determine and ensure that there wassufficient headroom with respect to the estimation uncertainty impact of such assumptionson the calculations
vi. Assessed that the disclosures made by the management are in accordance with theapplicable accounting standards.
Our opinion is not modified in respect of this matter.
Key Audit Matter
8. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
9. In addition to the matters described in the Basis for Qualified Opinion and MaterialUncertainty Related to Going Concern sections we have determined the matter describedbelow to be the key audit matter to be communicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|Recognition of contract revenue margin and contract costs (Refer note 2.1(xvi) of the standalone financial statements) |
|The Company's revenue primarily arises from construction contracts which by its nature is complex given the significant judgements involved in the assessment of current and future contractual performance obligations. ||Our audit of the recognition of contract revenue margin and related receivables and liabilities included but were not limited to the following: |
|Effective 1 April 2018 the Company has adopted Ind AS 115 || Evaluated the appropriateness of the Company's revenue recognition policies; |
|'Revenue from Contracts with Customers' using the cumulative catch-up transition method. Accordingly the Company recognizes revenue and margins based on the stage of completion which is determined on the basis of the proportion of value of goods or services transferred as at the Balance Sheet date relative to the value of goods or services promised under the contract. All the projects of the Company satisfy the criteria for recognition of revenue over time (using the percentage of completion method) since the control of the overall asset (property/ site / project) lies with the customer who directs the Company. || Assessed the design and implementation of key controls over the recognition of contract revenue and margins and tested the operating effectiveness of these controls; |
|Further the Company has assessed that it does not have any alternate use of these assets. || For a sample of contracts tested the appropriateness of amount recognized by evaluating key management judgements inherent in the forecasted contract revenue and costs to complete that drive the accounting under the percentage of completion method including: |
|The recognition of contract revenue contract costs and the resultant profit/loss therefore rely on the estimates in relation to forecast contract revenue and the total cost. ||- reviewed the contract terms and conditions; |
|These contract estimates are reviewed by the management on a periodic basis. ||- evaluated the identification of performance obligation of the contract |
|In doing so the management is required to exercise judgement in its assessment of the valuation of contract variations and claims and liquidated damages as well as the completeness and accuracy of forecast costs to complete and the ability to deliver contracts within contractually determined timelines. ||- evaluated the appropriateness of management's assessment that performance obligation was satisfied over time and consequent recognition of revenue using percentage of completion method. |
|The final contract values can potentially be impacted on account of various factors and are expected to result in varied outcomes. ||- tested the existence and valuation of claims and variations within contract costs via inspection of correspondence with customers; |
|Changes in these judgements and the related estimates as contracts progress can result in material adjustments to revenue and margins. As a result of the above judgments complexities involved and material impact on the related financial statement elements this area has been considered a key audit matter in the audit of the standalone financial statements. ||- obtained an understanding of the assumptions applied in determining the forecasted revenue and cost to complete; |
| ||- assessed the ability of the Company to deliver contracts within budgeted timelines and exposures if any to liquidated damages for late delivery; and |
| || Assessed that the disclosures made by the management are in ac- cordance with applicable accounting standards. |
information other than the Financial Statements and Auditor's
10. The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the financial statements and our auditor's report thereon. The Annual Report isexpected to be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
11. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs (financial position) profit orloss (financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Ind AS specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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.
12. 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.
13. Those Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
14. 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 withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
15. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain 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 Act we are also responsible for expressing our opinion on whether thecompany 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.
16. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
17. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
18. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on other Legal and Regulatory Requirements
19. The Company has not paid or provided for any managerial remuneration during theyear. Accordingly reporting under section 197(16) of the Act is not applicable.
20. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of section 143(11) of the Act we give in theAnnexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
21. Further to our comments in Annexure 1 as required by section 143(3) of the Act wereport that:
a) we have sought and except for the possible effects of the matters described in theBasis for Qualified Opinion section obtained all the information and explanations whichto the best of our knowledge and belief were necessary for the purpose of our audit;
b) except for the possible effects of the matters described in the Basis for QualifiedOpinion section in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books;
c) the standalone financial statements dealt with by this report are in agreement withthe books of account;
d) except for the possible effects of the matters described in the Basis for QualifiedOpinion section in our opinion the aforesaid standalone financial statements comply withInd AS specified under section 133 of the Act;
e) the matters described in paragraphs 3 4 5 and7 under the Material Uncertaintyrelated to Going Concern /Basis for Qualified Opinion section in our opinion may have anadverse effect on the functioning of the Company;
f) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2020 from being appointed as a director in terms of section 164(2) of the Act;
g) the qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion section;
h) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31 March 2020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 06 January 2021 as per Annexure 2 expressed modified opinion; and
i) 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:
i. the Company as detailed in Notes 4.4 11.3 15.1 15.4 18.2 30(A)(i) 30(A)(iii)30(A)(iv) and 37 to the standalone financial statements has disclosed the impact ofpending litigations on its financial position as at 31 March 2020.;
ii. except for the possible effects of the matters described in the Basis for QualifiedOpinion section the Company as detailed in Note 2.1 xvi to the standalone financialstatements has made provision as at 31 March 2020 as required under the applicable lawor Ind AS for material foreseeable losses if any on long-term contracts includingderivative contracts;
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2020;
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.
Annexure 1 to the Independent Auditor's Report
of even date to the members of Supreme Infrastructure India Limited on the standalonefinancial statements for the year ended 31 March 2020
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment (fixed assets).
(b) The Company has a regular program of physical verification of its property plantand equipments (PPE)under which PPE are verified in a phased manner over a period of threeyears which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. In accordance with this program certain fixed assets wereverified during the year and no material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties (which are included under the head'Property plant and equipment') are held in the name of the Company.
(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification.
(iii) The Company has granted interest free unsecured loans to three (3) companiescovered in the register maintained under Section 189 of the Act; and with respect to thesame:
(a) in our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the Company's interest.
(b) the schedule of repayment of the principal and the payment of the interest has notbeen stipulated and hence we are unable to comment as to whether repayments/receipts ofthe principal amount and the interest are regular;
(c) in the absence of stipulated schedule of repayment of principal and payment ofinterest we are unable to comment as to whether there is any amount which is overdue formore than 90 days and whether reasonable steps have been taken by the Company for recoveryof the principal amount and interest.
(iv) In our opinion the Company has complied with the provisions of Sections 185 and186 of the Act to the extent applicable in respect of loans investments guarantees andsecurity.
(v) I n our opinion the Compa ny has not accepted a ny deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersubsection (1) of Section 148 of the Act in respect of Company's products/services and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund
employees' state insurance income-tax sales-tax goods and service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues asapplicable have not been regularly deposited to the appropriate authorities and therehave been significant delays in a large number of cases. Undisputed amounts payable inrespect thereof which were outstanding at the year-end for a period of more than sixmonths from the date they became payable are as follows:
Statement of arrears of statutory dues outstanding for more than six months:
|Name of the statute ||Nature of the dues ||Amount (H in lakhs) ||Period to which the amount relates ||Due Date ||Date of Payment |
|Income Tax Act 1961 ||Tax Deducted at Source ||1797.93 ||April 2015 to August 2019 ||Various Dates ||Not yet Paid |
|The Employees' Provident Funds and Miscellaneous Provisions Act 1952 ||Provident Fund ||416.15 ||April 2016 to August 2019 ||Various Dates ||Not yet Paid |
|Profession Tax Act1975 ||Profession Tax ||9.89 ||April 2016 to August 2019 ||Various Dates ||Not yet Paid |
|Employees' State Insurance Act 1948 ||Employees' State Insurance Corporation ||24.90 ||April 2016 to August 2019 ||Various Dates ||Not yet Paid |
|Goods and Service Tax Act 2017 ||Goods and Service Tax ||1445.34 ||July 2017 to August 2019 ||Various Dates ||Not yet Paid |
|Name of the statute ||Nature of the dues ||Amount (H in lakhs) ||Period to which the amount relates ||Due Date ||Date of Payment |
|Maharashtra Value Added Tax 2002 ||Value Added Tax ||144.67 ||April 2014 to June 2017 ||Various Dates ||Not yet Paid |
|The Central Excise Act1944 ||Excise Duty ||33.23 ||December 2012 to June 2017 ||Various Dates ||Not yet Paid |
(b) There are no dues in respect of sales-tax duty of customs and duty of excise thathave not been deposited with the appropriate authorities on account of any dispute. Thedues outstanding in respect of service tax value added tax goods and service taxandincome tax on account of any dispute are as follows:
Statement of Disputed Dues:
|name of the statute ||nature of the dues ||Amount (H in lakhs) ||Amount paid under Protest (? in lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|The Finance Act 1994 ||Service tax ||7270.26 || ||F.Y. 2008-09 to 2011-12 ||Custom Exciseand Service Tax Appellate Tribunal |
|Maharashtra Value Added Tax 2002 ||Value Added Tax ||1919.78 || ||F.Y. 2014-15 to 2015-16 ||Assistant commissioner of State Tax. |
|Goods and Service Tax Act 2017 ||Goods and Service Tax ||2797.22 || ||July 2017 to Oct 2018 ||Assistant commissioner of State Tax. |
|Income Tax Act 1961 ||Income Tax ||7040.05 || ||July 2007- 08 to 2015- 16 ||Income Tax Officer Commissioner of Income Tax (Appeals) CPC Bengaluru |
(viii) There are no loans or borrowings payable to government and no dues payable todebenture holders. The Company has defaulted in repayment of following dues to the banksand financial institutions during the year which were not paid as at the Balance Sheetdate.
(H in lakhs)
|Banks/Financial institution ||Principal amount of default as on 31 March 2020 ||Period of Default |
|State Bank of India ||510.42 ||0-180 days |
| ||1002.42 ||181-365 days |
| ||7737.64 ||> 365 days |
|Union Bank of India ||217.61 ||0-180 days |
| ||312.61 ||181-365 days |
| ||1673.43 ||> 365 days |
|Punjab National Bank ||136.00 ||0-180 days |
| ||272.00 ||181-365 days |
| ||2222.84 ||> 365 days |
|Bank of India ||66.78 ||0-180 days |
| ||101.78 ||181-365 days |
| ||512.90 ||> 365 days |
|Banks/Financial institution ||Principal amount of default as on 31 March 2020 ||period of Default |
|Central Bank of India ||50.00 ||0-180 days |
| ||100.00 ||181-365 days |
| ||759.87 ||> 365 days |
|Syndicate Bank ||30.00 ||0-180 days |
| ||60.00 ||181-365 days |
| ||513.10 ||> 365 days |
|Canara Bank ||37.00 ||0-180 days |
| ||74.00 ||181-365 days |
| ||584.25 ||> 365 days |
|ICICI Bank ||420.27 ||0-180 days |
| ||434.71 ||181-365 days |
| ||699.79 ||> 365 days |
|Axis Bank ||40.82 ||0-180 days |
| ||32.45 ||181-365 days |
| ||- ||> 365 days |
|HDFC Bank ||- ||0-180 days |
| ||- ||181-365 days |
| ||307.28 ||> 365 days |
|Indian Overseas Bank ||- ||0-180 days |
| ||- ||181-365 days |
| ||1367.31 ||> 365 days |
|SREI Equipment Finance Limited ||- ||0-180 days |
| ||- ||181-365 days |
| ||6352.38 ||> 365 days |
|SREI Infrastructure Finance Limited ||- ||0-180 days |
| ||- ||181-365 days |
| ||807.00 ||> 365 days |
|JM Financial Asset Reconstruction ||6717.35 ||0-180 days |
| ||373.50 ||181-365 days |
| ||74.70 ||> 365 days |
|L&T Finance Limited ||12.04 ||0-180 days |
| ||12.04 ||181-365 days |
| ||13.24 ||> 365 days |
Note: The Company's Loans has be classified as NPA and therefore the Interest on thesame is not calculated by the banks and hence we are unable to compute the InterestOutstanding on the same
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
(xi) The Company has not paid or provided for any managerial remuneration during theyear. Accordingly the provisions of Clause 3(xi) of the Order are not applicable.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the standalone financial statements as required by the applicable Ind AS.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) In our opinion the Company has not entered into any noncash transactions with thedirectors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
Annexure 2 to the Independent Auditor's Report
on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 ofthe Companies Act 2013 ("the Act")
1. In conjunction with our audit of the standalone financial statements of SupremeInfrastructure India Limited ("the Company") as at and for the year ended 31March 2020 we have audited the internal financial controls over financial reporting("IFCoFR") of the Company as at that date.
Management's Responsibility for internal Financial Controls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting ('the Guidance Note') issued by the Institute of Chartered Accountants of India("the ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the Company's business including adherenceto Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of IFCoFR and the Guidance Note issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate IFCoFR wereestablished and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified opinion on the Company's IFCoFR. meaning of internalFinancial controls over Financial Reporting
6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR include those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements. inherent Limitations of internal Financialcontrols over
7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
Basis for Qualified opinion
8. According to the information and explanations given to us and based on our auditthe following material weaknesses have been identified in the operating effectiveness ofthe Company's internal financial controls over financial reporting as at 31 March 2020:
a. The Company's internal control system towards estimating the value in use of itsinvestment in subsidiary to determine the need to recognize an impairment loss as laiddown under Ind AS 36 'Impairment of Assets' were not operating effectively which couldpotentially result in a material misstatement in the carrying values of investments andits consequential impact on the earnings reserves and related disclosures in thestandalone financial statements.
b. The Company's internal financial controls over financial reporting with respect tothe process of assessing doubtful allowance of trade receivables were not operatingeffectively which could potentially result in a material misstatement in the recognitionof doubtful allowance and the resultant carrying value of the trade receivables in theCompany's standalone financial statements.
9. A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.
10. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting as at 31 March 2020 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by the ICAIand except for the possible effects of the material weaknesses described above in theBasis for Qualified Opinion paragraph the Company's IFCoFR were operating effectively asat 31 March 2020.
11. We have considered the material weaknesses identified and reported above indetermining the nature timing and extent of audit tests applied in our audit of thestandalone financial statements of the Company as at and for the year ended 31 March 2020and these material weaknesses have affected our opinion on the standalone financialstatements of the Company and we have issued a qualified opinion on the standalonefinancial statements.
For Ramanand & Associates
Firm Registration No: 117776W
Membership No: 103975 UDIN No: 21103975AAAAAN9212
Date: 06 January 2021