VSF Projects Ltd.
|BSE: 519331||Sector: Infrastructure|
|NSE: N.A.||ISIN Code: INE923K01014|
|BSE 00:00 | 20 Mar||VSF Projects Ltd|
|NSE 05:30 | 01 Jan||VSF Projects Ltd|
|BSE: 519331||Sector: Infrastructure|
|NSE: N.A.||ISIN Code: INE923K01014|
|BSE 00:00 | 20 Mar||VSF Projects Ltd|
|NSE 05:30 | 01 Jan||VSF Projects Ltd|
To the members of VSF Projects Limited
Report on the Standalone Financial Statements
Disclaimer of Opinion
We were engaged to audit the accompanying standalone financial statements of VSFProjects Limited ("the Company") which comprise the Balance Sheet as at March31 2018 and 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 andnotes to the financial statements including summary of the significant accounting policiesand other explanatory information.
We do not express an opinion on the standalone financial statements as at March 312018 of the Company because of the significance of the matters described in the Basis forDisclaimer of Opinion section of our report we have not been able to obtain sufficientand appropriate audit evidence to provide a basis for an audit opinion on these financialstatements.
Basis for Disclaimer of Opinion
We have not been able to obtain sufficient and appropriate audit evidence to form abasis for our audit opinion on those matters referred in Note No 2.27 in relation toProperty plant and equipment and Note No 2.28 in relation to Investments in subsidiariesforming part of notes to standalone financial statements as described below.
(a) Property Plant and Equipment:
The Company has elected revaluation model as its accounting policy for accounting itsproperty plant and equipment. Accordingly any differences arising between the Fair valueand carrying amount shall be recognized as Fair value through Other Comprehensive Income.In the absence of revaluation of the item of property plant and equipment(Land) on adate nearer to the reporting period i.e. 31st March 2018 the company has not accountedfor any revaluation difference in the Statement of OCI and continue to record propertyplant and equipment at previous carrying amount. Consequent to this we were unable todetermine the impact of such revaluation on the total comprehensive income of the Companyfor the year ended 31st March 2018.
(b) Investments :
Following the principles enumerated in Ind AS 27 Separate Financial Statements TheCompany elected to account for its investment in its subsidiary in accordance with Ind AS109 Financial Instruments .Ind AS 109 requires an entity to measure the investmentin equity shares at fair value and recognize the changes in fair value through profit andloss account. However it also gives an irrevocable option to an entity to recognize theaforesaid changes in fair value through other comprehensive income ("OCI"). Onthe transition date the Company has elected the irrevocable option to recognize the fairvalue changes in the equity shares in the subsidiary in Other Comprehensive Income.
However as the status of the subsidiary company is "Strike Off" as per ROCrecords the company has not carried out any fair value exercise in respect of itsinvestment in the subsidiary company and continues to carry such investment at itsprevious carrying amount of Rs 537199990/-.Consequent to this we are unable to determinethe recoverability of investments disclosed in the balance sheet of the company for theyear ended 31st March 2018 and impact of any adjustments that may be required to the Othercomprehensive income of the Company and also to the investment balance disclosed inbalance sheet as at 31st March 2018.
As a result of these aforesaid matters and owing to their materiality we are unable todetermine any adjustment that may be required in the standalone financial statements ofthe Company. Accordingly we do not express an opinion on the financial statements andother financial information of the Company.
Management's Responsibility for the Financial Statements
The Company's 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 including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; 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 presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Our responsibility is to conduct an audit of the entity's financial statements inaccordance with standards on auditing and to issue an auditor's report. However becauseof the matters described in the Basis for Disclaimer of Opinion section of our report wewere not able to obtain sufficient appropriate audit evidence to provide a basis for anaudit opinion on these financial statements.
We are independent of the entity in accordance with the ethical requirements and inaccordance with the requirements of code of ethics issued by ICAI and the ethicalrequirements as prescribed under the laws and regulations applicable to the entity.
Report on Other Legal and Regulatory Requirements
1) As required by Section 143(3) of the Act based on our audit we report to the extentapplicable that: a) Except for the effect of the matters described in the Basis forDisclaimer Opinion paragraph above we have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit. b) In our opinion except for the effect of the matters described in theBasis for Disclaimer Opinion paragraph above proper books of account as required by lawhave been kept by the Company so far as it appears from our examination of those books. c)Except for the matter described in the Basis for Disclaimer Opinion paragraph above theBalance Sheet the Statement of Profit and Loss including Other Comprehensive Income theCash Flow Statement and Statement of Changes in Equity dealt with by this Report are inagreement with the books of account.
In our opinion except for the effect of the matters described in the Basis forDisclaimer Opinion paragraph above the aforesaid standalone financial statements complywith the Indian Accounting Standards prescribed under section 133 of the Act. d) In ouropinion out of the total directors on the board 4 directors were disqualified by virtueof section 164(2)(a) of Companies Act 2013. Attention is drawn to note no 2.24 formingpart of notes to standalone financial statements for the aforesaid details. e) In ouropinion on the basis of written representations received from the other directors(excluding the directors disqualified by virtue of section 164(2)(a) of the Act) none ofthese directors is disqualified as on March 31 2018 from being appointed as a director interms of Section 164(2) of the Act. f) With respect to the adequacy of the internalfinancial controls over financial reporting of the Company and the operating effectivenessof such controls refer to our separate Report in "Annexure A". Our reportexpresses an unmodified opinion on the adequacy and operating effectiveness of theCompany's internal financial controls over financial reporting. g) With respect to theother matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 as amended in our opinion and to the best ofour information and according to the explanations given to us: i. The Company has nopending litigations on its financial position in its standalone financial statements; ii.Except for the effect of the matters described in the Basis for Disclaimer Opinionparagraph above the Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts; and iii. There has been no delay in transferring amountsrequired to be transferred to the Investor
Education and Protection Fund by the Company.
2) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act").
We have audited the internal financial controls over financial reporting of VSFProjects Limited ("the Company") as of March 31 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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 Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theAct to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover 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 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 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2018 based on the criteria forinternal financial control over financial reporting 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.
With reference to matters mentioned in Basis for Disclaimer of Opinion section theCompany's internal control system and Company's accounting policies needs to bestrengthened further.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report of even date) i. (a) The Company has maintainedproper records showing full particulars including quantitative details and situation offixed assets.
(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.
(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed /conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date. ii. As explained to us the inventories werephysically verified during the year by the Management at reasonable intervals and nomaterial discrepancies were noticed on physical verification.
iii. According to the information and explanations given to us the Company has notgranted loans secured or unsecured to companies firms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013 in respect of which: a) The terms and conditions of the grant of such loansare in our opinion prima facie not prejudicial to the Company's interest. b) Theschedule of repayment of principal and payment of interest has been stipulated andrepayments or receipts of principal amounts and interest have been regular as perstipulations. c) There is no overdue amount remaining outstanding as at the year-end. iv.In our opinion and according to the information and explanations given to us the Companyhas complied with the provisions of Sections 185 and 186 of the Act in respect of grant ofloans making investments and providing guarantees and securities as applicable. v.According to the information and explanations given to us the Company has not accepteddeposits in terms of directives issued by Reserve Bank of India and the provisions ofsections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under are not applicable. vi. The maintenance of cost records has notbeen specified by the Central Government under section
148(1) of the Companies Act 2013. vii. According to the information and explanationsgiven to us in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax Goods and Service Tax cess and other materialstatutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income tax Sales Tax Service Tax Customs Duty Excise Duty ValueAdded Tax Goods and Service Tax cess and other material statutory dues in arrears as atMarch 31 2018 for a period of more than six months from the date they became payableexcept in case of TDS amounting to Rs.8 49048/-.
(c) There were no dues of income tax or sales tax or service tax or duty of customs orduty of excise or value added tax on account of any dispute as on March 31 2018 viii.During the Year the company has defaulted in repayment of loan to SHRIRAM CITY UNIONFINANCE
LIMITED amounting to Rs 4498631/- including interest of Rs 2298336/- which is subjectto confirmation from the said financial institutions. ix. The Company has not raisedmoneys by way of initial public offer or further public offer (including debt instruments)or term loans and hence reporting under clause (ix) of the Order is not applicable. x. Tothe best of our knowledge and according to the information and explanations given to usno fraud by the Company and no material fraud on the Company by its officers or employeeshas been noticed or reported during the year. xi. In our opinion and according to theinformation and explanations given to us the Company has not paid / not provided anymanagerial remuneration for the year xii. The Company is not a Nidhi Company and hencereporting under clause (xii) of the Order is not applicable. xiii. In our opinion andaccording to the information and explanations given to us the Company is in compliancewith Section 177 and 188 of the Act where applicable forall transactions with therelated parties and the details of related party transactions have been disclosed in thefinancial statements etc. as required by the applicable accounting standards. xiv. Duringthe year the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures and hence reporting under clause (xiv) ofthe Order is not applicable to the Company. xv. In our opinion and according to theinformation and explanations given to us during the year the
Company has not entered into any non-cash transactions with its directors or directorsof its holding or subsidiary company or persons connected with them and hence provisionsof section 192 of the Act are not applicable. xvi. The Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act