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INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF OM METALS INFRAPROJECTS LIMITED
Report on the Financial Statement
1. We have audited the accompanying standalone financial statements of Om Metals Infraprojects Limited (The Company') which comprise the Balance Sheet as at 31 March, 2015. the Statement of Profit and Loss, the cash flow statement for die year then ended and a summary of significant accounting policies and other explanatory information. In which are incorporated financial statements of Engineering, Real estate & Hotel Divisions of the Company audited by other auditors and whose reports have been furnished to us. Our opinion, in so far as it relates to the affairs of such division is based solely on the report of other auditors.
Management's Responsibility for the Financial Statements
2. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :
a) in the case of balance sheet, of the state of affairs of the Company as at 31st March, 2015,
b) in the case of the statement of profit and loss of the profit for the year ended on that date.
c) in the case of the cash flow statement, of the case flow for the year ended on that date.
9. Emphasis of matter(s)
i) We did not audit the financial statement of joint venture reflecting company's share in profit of Rs. 1712.47 Lacs in financial Statement of the Company. These financial statements have been audited by the other Auditors whose reports have been furnished to us by the management, and our opinion, in so far as it relates to the amounts included in respect of said audited Joint Ventures/ Firm, is based solely on the reports of the other Auditors. Our opinion is not qualified in respect of these matters.
ii) The financial statement of branches located at Rawanda, and Nepal reflecting profit(Net) of Rs. 106.81. Lacs in financial Statement of the Company. These financial statements are unaudited but the Auditors of Engineering Divisions have reviewed the Financial Statements and incorporated in the engineering division. Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirement
10. As required by the companies (Auditor's Report) order, 2015 vide order dated 10th April 2015 issued by the Central Govt, of India in terms of Section 143(11) of the Act,. The matter which on which reporting are required under CARO 2015 Audit Report as per Annexure–A.
11. 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 best of 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 the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches i.e. Engineering, Real estate & Hotel Divisions of the Company not visited by us .
(c) The report(s) on the accounts of the branch office(s) i.e. Engineering, Real estate & Hotel Divisions of the Company audited under section 143 (8) of the Act. By the branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
(d) The standalone financial statements dealt with by this report are in agreement with the books of accounts and with the returns received from the branches not visited by us.
(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.(as amended)
(f) Under the emphasis of matter, in our opinion ,there is no adverse effect on the functioning of the company .
(g) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the company has disclosed the impact of pending litigation on its financial position in its Financial Statement as referred in Note no 2.28(b) to the Financial Statement.
ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long term contracts did not have any long–term contracts including derivative contracts.
iii. There has been no delay in transferring amounts , required to be transferred , to die Investor Education and Protection Fund by the company.
ANNEXURE A TO THE IN DEPENDENT AUDITOR'S REPORT
Annexure referred to in paragraph I under the heading of "Report oil other legal and Regulatory requirements" of the independent Auditor's Report 011 the Accounts of Om Metals Infraprojects Limited ("The Company") for the year ended on 31s' March 2015.
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and tire books of accounts and other records examined by us in the normal course of audit, In preparing the report, we have considered the report made under the aforesaid order by other auditors, who have audited the accounts of the Divisions of Engg., Real estate and Hotel of the Company we report that:
(i) In respect of fixed assets :
a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b) The fixed assets were physically verified during the year by the management in accordance with a program of verification, the frequency of verification is reasonable having regard to the size of the company and the nature of its fixed assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification as compared to books records.
(ii)(a) As explained to us, the inventory of the Company has been physically verified during the year by tire management, except goods in transit. In our opinion, the frequency of verification is reasonable.
(b) According to the information and explanation given to us, in our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. © On the basis of our examination of records of inventory, we are of the opinion, that, the Company is maintaining proper records of inventories . The discrepancies noticed on physical verification of inventories as compared to book records were not material having regard to the size or the operations of the Company and have been properly dealt within the books of accounts.
(iii) According to information and explanations given to us, during the year the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the companies Act, 2013 other than unsecured loan granted to the 2 nos of Wholly owned subsidiaries. The maximum amount outstanding at any time during the year was Rs. 21997.68 Lacs and the year end balance of such loans so granted was Rs.20497.68 Lacs, which are Interest free loans and further explained to us, these loans have been made for setting up new projects and make strategic Investments in step subsidiaries/ Joint Ventures.
a) there is no repayment schedule, hence we are unable to comment as to whether receipt of Principal amount is regular.
(iv) There is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to the sale of goods and services. Further, on the basis of our examination and according to the information and explanations give to us, we have not observed any continuing failure to correct major weaknesses in such internal control system.
(v) The company has not accepted any deposits within the meaning of section 73 to 76 of the Companies Act and the Companies (Acceptance of Deposits) Rules, 2014 (As Amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of accounts maintained by the company, pursuant to the Rules made by the Central Govt., for the maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 in respect of generation" of Electricity, Construction Projects and Road and other infrastructures of the company and are of the opinion that, prima–facia, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.
(vii)(a) According to the records of the company, the company has generally been regular in depositing undisputed statutory dues in respect of income tax, Service Tax, Sales Tax, Wealth Tax, Excise duty, P.F. & ESI and duty of customs, Value added Tax, Cess and other material statutory dues applicable have generally been regularly deposited within the appropriate authorities, though there has been delay in a few cases. Further, no undisputed amount payable in respect thereof were outstanding at the year end for a period more than six months from the date they became payable.
(b) According to information and explanation given to us, no undisputed amount of statutory dues in respect of income tax, Service Tax, Sales Tax , Excise duty, P.F. & ESI and other statutory dues outstanding as at 31.03.2015 for a period more than 6 months from the date on which they became payable.
According to the information and explanations given to us and the records of the company examined by us, details of the following disputed dues that were not deposited with the appropriate authorities
Note: 1) Amount as per demand orders including interest and penalty wherever quantified in the order.
2) In the matter of the Income tax,the department has disallowed expenditure /80IB aggregating Rs. 10684.71 Lacs during the Financial Years 1976–77,1995–96, 2001–2002 to 2008–2009 & 2010–11.The appeals were decided in favour of the company.
The department has preferred appeals with the Hon' ble High Court/ITAT .The tax liability if any arriasing on the a final outcome of the case is indeterminate hence could not be provided.
(c) According to the records of the company, the company has transferred the requisite amount to the investor education and protection fund in accordance with the relevant provisions of the Companies Act and rules made there under.
(viii) The Company does not have accumulated losses as at 31st March 2015 and has not incurred cash losses during the financial year ended on that date or in the immediately preceding financial year ended March 31,2014.
(ix) In our opinion and according to the information and explanation given to us the company has not defaulted in repayment of dues' to financial institution, bank or to debenture holders during the year.
(x) On the basis of the information given to us, the company has given guarantees for loans taken by others from banks or financial institutions during the year which are not prime– facie, prejudicial to the interest of the Company.
(xi) To the best our knowledge and belief and according to the information's and explanations given to us, the company has applied the term Loans for the purpose for which these loans were obtained during the year.
(xii) According to the information and explanations given to us, during the year, no. fraud on or by the Company has been noticed or reported during the course of our audit.
For M.C. BHANDARI & CO.
FIRM REG. N0.303002E
( S.K. MAHIPAL )