INDEPENDENT AUDITORS
To the Members of
LOK HOUSING AND CONSTRUCTIONS LIMITED
Report on the Financial Statements
1. We have audited the accompanying financial statements of LOK HOUSING AND
CONSTRUCTIONS LIMITED (the Company), which comprise the Balance Sheet as at March 31,
2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then
ended, and other a summary of significant explanatory information.
Management’s Responsibility for the Financial Statements.
2. Management is responsible for the preparation of these financial statements that
give a true and fair view of the performance financial position, financial and cash flows
of the Company in accordance with the Accounting Standards referred to in sub-section (3C)
of section 211 of the Companies Act, 1956 ("the Act"), read with The General
Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013. This responsibility includes the
design, implementation and maintenance of internal control 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.
Auditors’ Responsibility
3. Our responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit in accordance with the Standards on Auditing issued by
the Institute of Chartered Accountants of India. 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.
4. An audit involves performing procedures to obtain audit evidence about the amounts
and 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 control relevant to the Company’s preparation and fair
presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to the explanations
given to us, the 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, subject to the Company having not made
provision for additional consideration / compensation claimed by Mr.Suresh Thanawala and
others, a secured creditor for land development rights as the same being disputed and
under negotiation, the amount there of being unascertainable, give a true and fair view;
a) in the case of the Balance Sheet, of the state of affairs of the Company as at March
31, 2014;
b) in the case of the Statement of Profit and Loss, of the profit for the year ended on
that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that
date.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor’s Report) Order, 2003 (the Order) issued
by the Central Government of India in terms of sub-section (4A) of section 227 of the Act,
we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the
Order.
8. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit;
b) in our opinion proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with
by this Report are in agreement with the books of account.
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement comply with the Accounting Standards referred to in subsection (3C) of section
211 of the Companies Act, 1956 read with The General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013;
e) on the basis of written representations received from the directors as on March 31,
2014, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2014, from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to the rate at which
the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any
Rules under the said section, prescribing the manner in which such cess is to be paid, no
cess is due and payable by the Company.
|
For Bhupendra Shroff & Co. |
|
Chartered Accountants |
|
Firm No.: 101458W |
|
B. N. Shroff |
|
Partner |
|
Membership No.: 5039 |
| Place : Mumbai, |
|
| Date : May 29th, 2014 |
|
The Annexure referred to in paragraph 7 of the Our Report of even date to the members
of LOK HOUSING AND CONSTRUCTIONS LIMITED on the accounts of the Company for the year ended
31st March, 2014.
On the basis of such checks as we considered appropriate and according to the
information and explanation given to us during the course of our audit, we report that:
1a. The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
1b. As per the information and explanations given to us physical verification of fixed
assets has been carried out at regular intervals and we have been informed that no
material discrepancies were noticed on such verification. In our opinion, the frequency of
verification is reasonable, having regard to the size of the Company and nature of its
fixed assets.
1c. During the year, the Company has not disposed of any substantial / major part of
fixed assets.
2a. As per the information furnished, the inventories have been physically verified
during the year by the management. In our opinion, having regard to the nature and
location of stocks, the frequency of the physical verification is reasonable.
2b. In our opinion and according to the information and explanations given to us the
procedure for physical verification of inventory followed by the management are reasonable
and adequate in relation to the size of the Company and the nature of business.
2c. The Company is maintaining proper records of inventory. In our opinion,
discrepancies noticed on physical verification of stocks were not material in relation to
the operations of the Company and the same have been properly dealt with in the books of
account.
3a. As per the information furnished, the Company has outstanding unsecured advances
given aggregating to Rs. 0.65 lacs (previous year Rs. 6.49 lacs) to 1 party (previous year
3 party) listed in the register maintained under Section 301 of the Companies Act, 1956,
the terms of which are prima facie not prejudicial to the interest of the Company.
3b. As per the information furnished, the Company has not taken loans (previous year
nil) from any party (previous year no party) listed in the register maintained under
Section 301 of the Companies Act, 1956, the terms of which are prima facie not prejudicial
to the interest of the Company.
4. In our opinion and according to the information and explanations given to us, there
are adequate internal control procedures commensurate with the size of the Company and the
nature of its business with regard to purchase of inventory and fixed assets and for the
sale of goods. During the course of our audit, no major weakness has been noticed in the
internal control procedures.
5a. Based on the audit procedures applied by us and according to the information and
explanations provided by the management, we are of the opinion that the transactions that
need to be entered into the register maintained under Section 301 have been so entered.
5b. In our opinion and according to the information and explanations given to us, there
are no transactions exceeding the value of Rs. five lacs each which have been made at
prices which are unreasonable having regard to prevailing market prices at the relevant
time.
6. In our opinion, the Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A and 58AA of the Companies Act,
1956 and rules made there under. Hence, the Clause (vi) of the order is not applicable.
7. The Company has an adequate internal audit system commensurate with the size of the
Company and the nature of its business. However the same need to be strengthened.
8. As informed to us, the maintenance of cost records has been prescribed by the
Central Government under section 209(1)(d) of the Companies Act,1956, in respect of the
activities carried on by the Company. On our verification and as per information and
explanation given to us such accounts and records have been made and maintained.
9a. According to the information and explanations given to us and the records examined
by us, the Company is generally depositing with appropriate authorities undisputed
statutory dues including provident fund, investor education and protection fund,
employees’ state insurance, income-tax, sales-tax, wealth-tax, customs duty,
excise-duty, cess and other statutory dues wherever applicable. Undisputed arrears of
statutory dues outstanding as at 31st March, 2014 for a period of more than six months
from the date they became payable are as under:
| Nature of dues |
Period |
Undisputed Tax |
|
|
Amount (Rs. in lacs) |
| Income tax |
F.Y. 2010-11 |
23.12 |
| Income tax |
F.Y. 2011-12 |
38.94 |
| Income tax |
F.Y. 2007-08 (Lok Enterprises) |
0.96 |
| Income tax |
F.Y. 2010-11 (Lok Enterprises) |
96.73 |
| Income tax |
F.Y. 2011-12 (Lok Enterprises) |
0.45 |
| Service Tax |
F.Y. 2010-11 |
37.05 |
| Service Tax |
F.Y. 2011-12 |
32.35 |
| Service Tax |
F.Y. 2012-13 |
6.14 |
9b. According to the records of the Company, dues of sales tax, income-tax, customs,
wealth-tax, excise duty, cess (excluding interest) which have not been deposited on
account of disputes and the forum where the dispute is pending are as under:
| Nature of dues |
Period |
Forum |
Disputed Tax Amount |
|
|
|
(Rs. in lacs) |
| Income tax |
F.Y. 2004-05 |
ITAT, Mumbai |
10.44 |
| Income tax |
F.Y. 2008-09 |
CIT(A) |
1045.41 |
| Income tax |
F.Y. 2008-09 |
ITAT, Mumbai |
26.46 |
| Income tax |
F.Y. 2009-10 |
CIT(A) |
1662.34 |
| Income tax |
F.Y. 2010-11 |
CIT(A) |
100.45 |
Please refer to note no. 15.5 of notes to accounts, regarding non provision of interest
u/s 220 of the Income Tax Act, 1961.
10. There are no accumulated losses of the Company as on 31st March, 2014. The Company
has not incurred any cash loss during the financial year covered by our audit but has
incurred cash loss of Rs.16.55 lacs in the immediately preceding financial year.
11. During the year, repayment of dues to financial institutions and banks are partly
made and as per the Company’s records the amount due in this respect is as under:
| Sr. No. |
Name of Insti- tution / Bank |
Amount of due o/s on 31-03-2014 |
Over due since |
|
|
(Rs. in lacs) |
|
| 1. |
State Bank of India |
1656.27 |
31-03-2014 |
12. Based on our examination of the records and the information and explanations given
to us, the Company has not granted any loans and/or advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. In our opinion, provisions of any special statute applicable to chit fund /nidhi /
mutual benefit fund/ society are not applicable to the Company.
14. In our opinion and according to the information and explanation given to us, the
Company is not a dealer or trader in shares securities, debentures and other investments.
15. In our opinion and according to the information and explanation given to us, the
Company has not given any guarantees for loans taken by others from banks or Financial
Institutions.
16. In our opinion and according to the information and explanation given to us, on an
overall basis, the term loans have been applied for the purpose of which they are
obtained.
17. According to the information and explanations given to us and on the basis of an
overall examination of the Balance sheet of the Company, in our opinion no funds raised on
short-term basis have been used for long-term investment. Similarly no long-term funds
have been used to finance short-term assets except permanent working capital.
18. According to the information and explanations given to us, the Company has not made
any preferential allotment of shares during the year.
19. According to the information and explanations given to us, during the year, the
Company has not issued any debentures.
20. According to the information and explanations given to us, during the year the
Company has not raised any money by way of public issues.
21. According to the information and explanations given to us, no material fraud on or
by the Company has been noticed or reported during the year.
|
For Bhupendra Shroff & Co. |
|
Chartered Accountants |
|
Firm No.: 101458W |
|
B.N. Shroff |
|
Partner |
|
Membership No.: 5039 |
| Place : Mumbai, |
|
| Date : May 29th, 2014 |
|
+91-9892691696
