CMM Infraprojects Ltd Auditors Report.
CMM INFRAPROJECTS LIMITED
Report on thefinancial Statements
We have audited the accompanying financial statements of CMM INFRAPROJECTS LIMITED, Shalimar Corporate Centre, 108, 8B, Nath Mandir Road, South Tukoganj, Indore, Madhya Pradesh 452001, which comprises of the Balance Sheet as at 31 March, 2019, the Statement of Pro t and Loss and cash flow statement, for the year then ended and a summary of significant accounting policies and other explanatory information of the company.
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:
(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31 March, 2019; and
(b) In the case of the Statement of Pro t and Loss of the profit, for the year ended on that date;
(c) In the case of the Cash Flow Statement, for the year ended on that date
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of thefinancial Statements section of our report. We are independent of the Company in accordance with the Code of ethics issued by the Institute of Chartered accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. There is no key audit matter to be communicated in our report.
We do not audited the two branches, Nagpur and Bhubaneswar. These financial statement have been audited by other auditors whose reports have been furnished to us by the management, and our opinion on the financial statement of the company for the year ended to the extent they relate to the financial statement not audited by us stated in this paragraph is solely based on the audit report of other auditor. Our opinion is not qualified in respect of this matter.
Information Other than thefinancial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report and Business Responsibility Report, but does not include the financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managements Responsibility for thefinancial Statements
The Companys 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 and presentation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, prescribed under Section 133 of the Act. 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 misstatements, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of directors are also responsible for overseeing the Companys financial reporting process.
Auditors Responsibilities for the Audit of thefinancial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole, are free from material misstatements, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercised professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in order to design 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 the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a. we have sought 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. In our opinion the Balance Sheet, Statement of Pro t and Loss and cash flow statement, dealt with by this Report are in agreement with the books of account ;
d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, with the rule of the Companies (Accounts)Rules, 2014;
e. On the basis of written representations received from the directors as on 31 March, 2019, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2019, from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure B. Our Report expresses disclaimer of opinion on the companys internal financial controls over financial reporting for the reason stated therein.
g. With respect to the other matters to be included in the Auditors 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. (Refer Note 28),
ii. The company does not have any long term contracts including derivative contracts for which there were any material foreseeable losses,
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company.
For: SPARK& Associates
Chartered Accountants FRN: 005313C
Pankaj Kumar Gupta
Membership No. 404644
Date : 30.05.2019, Indore
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
The annexure referred to the Independent Auditors Report to the members of the company on the financial statements for the year ended 31 March, 2019, we report that:
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.
(b) The Company does not have a regular programme of physical verification of its fixed assets however, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is not reasonable having regard to the size of the Company and the nature of its assets.
(c) The Company does not have any immovable property under Fixed Asset head.
ii. As explained to us the physical verification of certain inventory has been conducted at reasonable intervals by the management and no material discrepancies were notice on such verification. As explained by the management that the company is involved in construction activities and there are so many items spread out at the site so it is very difficult to maintain the quantitative records of each and every item.
iii. In our opinion and according to the information and explanations given to us, the Company has granted unsecured loans, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (the Act).
a) In our opinion, loans and advances granted by company is prejudicial in companys interest since loans are Non- Interest Bearing.
b) There is no legal loan agreement between company and borrower containing the terms for the repayment of loan
|S. No||Name of Party||Amount||Reasonable Steps|
|1||Laxmi Logistic||5,00,000||Constant Follow up has been taken|
|2||Shiv Jyoti Estate||12,46,977||Constant Follow up has been taken|
iv. In our opinion and according to the information and explanation given to us, the company has not complied with section 185 of Companies Act, 2013. Company has granted loan to Laxmi Logistic and Shiv Jyoti Estate (Director having controlling Interest). The Company has complied with Section 186 of Companies Act,2013 as applicable.
v. The company has not accepted any deposit from public.
vi. According to the information and explanations provided to us, the Companies (Cost Accounting Record) Rules 2011 have been applicable to the companies for its construction operations. The Company has appointed Sushil Kumar Mantri & Associates, Cost Accountant (FRN: 101049) to reviewed books of accounts maintained by the company and pursuant to the rules made by the Central Government for maintenance of Cost Records under sub section (I) of section 148 of the Act in respect of construction activity. The final audit report of the Independent Cost Auditor is not provided by the company hence we are not able to give any comment on cost records maintained by the company.
vii. (a) According to the information and explanations given to us and on the basis of our examination of the records, the Company has been irregular in depositing undisputed statutory dues excluding GST.
(b) According to the information and explanations given to us, undisputed amounts payable in respect of provident fund, income tax, sales tax, service tax, duty of customs, value added tax, Goods and Service tax, cess and other material statutory dues were in arrears as at 31 March, 2019 for a period of more than six months from the date they became payable.
|S.No||Type of Dues||Period to which amount relates||Amount|
|1.||Provident Fund||FY 2018-19||1,12,320|
|4.||Income Tax||FY 2017-18||63,56,210|
(c) The disputed statutory dues aggregating Rs.3,08,96,740 that have not been deposited on account of disputed matters pending before appropriate authorities are as under:
|S.No||Name of the Statute||Nature of the Dues||Amount Pending||Period to which the amount relates||Forum Where dispute is pending|
|1||Service Tax||Service tax Demand||3,08,96,740||January 2013 to March 2016||DGCEI INDORE,SERVICE TAX|
viii. Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the Company has defaulted in repayment of loans / borrowings to the financial institutions, banks, Government or debenture holders as per details given here-under:.
|S.No||Particular of Bank/Fifinancial Institution||Amount of Default||Period of Default (in Days)|
|1||CAPITAL FIRST LTD-2||4,11,979||74,533||60|
|3||ICICI BANK (CE-10)||1,93,027||33,974||240|
|4||ICICI BANK (CE -123)||8,01,372||1,37,322||210|
|5||ICICI BANK (CE -4,5,6,7,8)||9,44,908||1,64,626||240|
|7||ICICI BANK LTD (LOADER )||6,58,876||76,285||120|
|8||ICICI BANK (DUMPER 1)||2,59,993||22,741||30|
|9||ICICI BANK (TANDAM ROLLER)||4,09,295||67,192||240|
|10||ICICI BANK (TANDAM ROLLER)||7,47,059||1,46,355||450|
|11||HDFC BANK (FINE ROCK BRAKER)||2,47,359||38,391||300|
|12||HDFC BANK (MOTOR GRADER)||33,23,801||4,67,539||270|
|13||HDFC BANK (POCLAIN - HYUNDAI)||8,94,904||1,38,896||300|
|14||HDFC BANK (POCLAIN - KOMATSU)||10,42,009||1,61,740||300|
|15||HDFC BANK (SOIL COMPACTOR)||18,17,458||2,82,092||300|
|16||HDFC BANK (TEREX CRUSHER)||72,42,000||15,07,400||300|
|17||HDFC BANK (MAHINDRA DUMPER)||55,15,345||9,17,495||300|
|18||HDFC BANK (NEW BOLERO)||3,10,584||41,305||210|
|19||HDFC BANK (POCLAIN-2)||10,91,533||1,49,677||300|
|20||HDFC BANK (VSI-1000)||4,30,389||75,611||330|
|21||SREI FINANCE LTD||3,02,000||12,000||30|
Except above The Company has also defaulted in repayment of loan of Kotak Mahindra Bank Since Loan statement has not been produced before us we cannot ascertain Default amount and outstanding period of default of aforesaid loan.
ix. The company has raised money by way of term loan and the same was applied for the purpose for which it has been raised. The company has not made any further public offering during the year.
x. According to the information and explanations given to us, no fraud by the Company or on the company by its of cers or employees has been noticed or reported during the course of our audit.
xi. According to the information and explanation given to us and based on our examination of the records of the Company, the company has paid/ provided for managerial remuneration in accordance with the requisite approvals by the provisions of section 197 read with Schedule V to the Act.
xii. In our Opinion and according to the information and explanation given to us, the Company is not a Nidhi company.
xiii. According to our information and explanation given to us and based on our examination of the records of the company, transaction with the related parties are in compliance with section 177 and 188 of the Act where applicable and details of such transaction have been disclosed in the financial statement as required by the applicable accounting standards.
xiv. According to information and explanation given to us and based on our examination of the records of the company, the company has not made any preference allotment or private allotment of shares or fully or partly convertible debentures during the year.
xv. According to information and explanation given to us and based on our examination of the records, the company has not entered into non-cash transaction with the directors or persons connected with him. Accordingly, paragraph 3 (xv) of the order is not applicable.
xvi. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
|For: SPARK& Associates|
|Pankaj Kumar Gupta|
|Membership No. 404644|
|Date : 30.05.2019, Indore|
ANNEXURE B TO INDEPENDENT AUDITORS REPORT
Report on the Internalfinancial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
We have audited the internal financial controls over financial reporting of CMM INFRAPROJECTS LIMITED as at 31 March, 2019 in conjunction with our audit of the financial statements of the company for the year ended on that day.
Managements Responsibility for Internalfinancial Controls
The Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internalfinancial Controls overfinancial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required by the Companies Act, 2013.
Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internalfinancial Controls Overfinancial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.
Meaning of Internalfinancial Controls overfinancial Reporting
A Companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Basis for Disclaimer of Opinion
According to information and explanation given to us, the company has not established its internal financial control over financial reporting on criteria based on or considering the essential components of internal control stated in Guidance note issued by Institute of Chartered Accountants of India.
Disclaimer of Opinion
Because of the signi cance of the matter described in the Basis of Disclaimer of Opinion paragraph above we are unable to obtain sufficient appropriate audit evidence to provide a basis of our opinion whether company had adequate internal financial control over financial reporting and whether such internal financial control were operating effectively as at 31stMarch 2019. Accordingly we dont express an opinion on the company internal financial control over financial reporting.
We have considered the disclaimer reported above in determining the nature, timing and extent of audit test applied in our audit of financial statement of company for the year ended 31st March 2019, and the disclaimer does not affect our opinion on the said financial statement of company.
For: SPARK& Associates
Chartered Accountants FRN: 005313C
Pankaj Kumar Gupta
Membership No. 404644.
Date : 30.05.2019, Indore