TO THE MEMBERS OF DFL INFRASTRUCTURE FINANCE LIMITED
Report on the Financial Statements
We have audited the accompanying standalone financial statements of M/s. DFL
INFRASTRUCTURE FINANCE LIMITED ("the Company"), which comprise the Balance
Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement
for the year then ended, and a summary of the significant accounting policies and other
explanatory information.
Managements Responsibility for the Standalone Financial 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 of
these standalone 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. This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding 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.
Auditors Responsibility
Our responsibility is to express an opinion on these standalone financial statements
based on our audit. 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 thereunder. 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.
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
auditors judgement, 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 Companys 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 control system
over financial reporting and 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 Companys Directors, as well as
evaluating the overall presentation of the financial statements.
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.
Basis for Qualified Opinion
The debit balances under receivables and debtors accounts and the credit balances are
as per books of accounts subject to confirmation from the parties.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion paragraph above, 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, of the state of
affairs of the Company as at 31stMarch, 2015, and its profit and its cash flows for the
year ended on that date.
Emphasis of Matter
Attention of the share holders is invited to the following:
a. The loans taken from some banks became NPA. The CDR Package and the CDR Rework
Package were withdrawn by the CDR Empowered Group. In the meanwhile, the Company has
approached the bankers for One Time Settlement Scheme for settlement of Loans and some of
the banks have approved the same.
The OTS Scheme offered by some of the Banks is pending implementation and settlement.
These conditions, indicate the existence of material uncertainty that may cast a
significant doubt about the Companys ability to continue as a Going Concern. (Refer
Note 1, 7 & 8 of Schedule 18)
b. The Companys net owned funds is below Rs. 25 lakhs, the limit prescribed by Reserve
Bank of India under section 45 - IA of the Reserve Bank of India Act, 1934. This could
attract penal provisions under section 45 - MC of the Act
c. The Reserve Bank of India, has issued certain prohibitory directions (Refer Note
2 & 3 of Schedule 18) under Section 45JA and Section 45L of Reserve Bank of India
Act, 1934. These conditions along with those stated in Note 1, 7 & 8 of Schedule 18
indicate the existence of material uncertainty that may cast a significant doubt about the
Companys ability to continue as a Going Concern. d. The Company has entered into an
amendment agreement with Asia Pragati Capfin Pvt. Ltd. (Preference Share Holder) on 27th
March 2012 for redemption of preference shares of Rs.10 @ Rs. 8.54 per share.
The gain on redemption amounting to Rs.325 lakhs has not been accounted for as the same
would be accounted at the time of redemption during the years 2017, 2018 & 2019.
(Refer Note No. 6 of Schedule 18)
e. The shareholders have not approved the re-appointment and increase in remuneration
of the erstwhile Managing Director and the amount is included in Loans and Advances. We
are unable to express an opinion on the recoverability of the amount. (Refer Note No.
12 of Schedule 18)
f. The remuneration of Whole Time Director for FY 2013-14 fixed by the Board of
Directors was not fully approved by the Central Government, Ministry of Corporate Affairs
vide its order dated 06th August 2014. The company is in the process of filing a petition
for waiver of the excess amounts paid (Refer Note No. 14 of Schedule 18).
g. In the absence of profits, the Company could not declare dividend on the 4% and 9%
Redeemable Preference Shares for the financial year 2014 -15 and hence it is not charged
to the Statement of Profit and Loss. (Refer Note No. 19 of Schedule 18).
h. The company has not appointed internal auditor for the audit of books of accounts
for the FY 2014 - 15.
(Refer Note No. 4 of Schedule 18)
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2015 (the Order) issued by
the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we
give in 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 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.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
(d) 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. (e) On the basis of written representations received
from the directors as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being appointed as a
director in terms of Section 164 of the Act.
(f) 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 litigations on its financial
position in its financial statements - Refer Note 19 & 20 of Schedule 18 to the
financial statements;
ii. The company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
|
For P.B.VIJAYARAGHAVAN AND CO., |
|
Chartered Accountants |
|
Firm Registration No.: 004721S |
|
K. RAJAGOPALAN |
| Place : Chennai |
Partner |
| Date : 30.05.2015 |
Membership No.: 14523 |
ANNEXURE TO THE AUDITORS’ REPORT
I. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars including
quantitative details and situation of Fixed Assets.
(b) As per the information and explanation given to us, all the fixed assets have been
physically verified by the management at regular intervals, which in our opinion, is
reasonable having regard to the size of the Company and the nature of the assets. No
material discrepancies were noticed on such verification
II. As the Company is a Non Banking Finance Company, the provisions of sub clause
(ii) a, b and c of the Companies (Auditors Report) Order, 2015 are not applicable.
III. TRANSACTIONS WITH PERSONS COVERED BY REGISTER MAINTAINED U/S 189 OF
THE COMPANIES ACT 2013:
a) 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.
IV. INTERNAL CONTROL :
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 purchases of fixed assets and with regard to the
sale of services. During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal controls in other areas.
V. PUBLIC DEPOSITS :
In our opinion and according to the information and explanations given to us, the
company has not accepted deposits from public and hence the provisions of sections 73 to
76 or any other provisions of the Companies Act and the rules made there under are not
applicable to the company.
VI. COST ACCOUNTING RECORDS :
The Central Government has not prescribed maintenance of cost records under Section 148
(1) of the Companies Act, 2013.
VII. STATUTORY DUES :
(a) The company has generally been regular in depositing Provident Fund dues of its
employees.
Based on information and explanation given to us, no undisputed amounts payable in
respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Value Added Tax, Cess and any other statutory dues were outstanding as at 31st March 2015
for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of
Income Tax, Sales Tax, Customs duty, Wealth Tax, Excise Duty, Value Added Tax and Cess
which have not been deposited on account of any dispute except as reported below:
| Forum before which it is pending |
Assessment Year |
Tax due amount (In Lakhs) |
Forum before which it is pending |
|
1995-96 To 1999-2000 |
246.16 |
CIT (A) |
|
2001-02 |
294.03 |
CIT (A) |
|
2002-03 |
56.35 |
ITAT, Chennai |
|
2003-04 |
13.91 |
ITAT, Chennai |
| Income Tax Act, 1961 |
2004-05 |
8.34 |
ITAT, Chennai |
|
2005-06 |
4.44 |
CIT (A) |
|
2007-08 |
58.17 |
CIT (A) |
|
2008-09 |
482.15 |
CIT (A) |
|
2011-12 |
581.28 |
CIT (A) |
(c) The company has generally been regular in transfer of amounts required to be
transferred to Investor Education and Protection Fund in accordance with relevant
provisions of Companies Act, 2013.
VIII. ACCUMULATED LOSSES :
The accumulated losses of the Company at the end of the financial year are not less
than fifty percent of its net worth. The Company has incurred cash losses in the financial
year and in the immediately preceding financial year also.
IX. The loans taken from some banks became NPA. The repayment has to commence from
01.04.2012.
The Company has gone for rescheduling the repayment of the term loans. The CDR Package
and the CDR Rework Package were withdrawn by the CDR Empowered Group. The Company has
submitted proposals for One Time Settlement and the same is being taken up by the Banks.
Also the One Time Settlement Scheme has been approved by 3 out of 12 participating banks
and one another bank not forming part of CDR. Pending repayment of amounts accepted
through OTS Scheme the Company has not complied with Terms of OTS Scheme. (Refer Note 6, 8
& 9 of Schedule 18)
X. The company has not given any guarantee for loans taken by others from banks or
financial institutions based on the records produced to us.
XI. In our opinion, the term loans have been applied for the purpose for which they
were obtained.
XII. FRAUDS :
According to the information and explanations given to us, no fraud on or by the
Company has been noticed or reported during the course of our audit.
|
For P.B.VIJAYARAGHAVAN AND CO., |
|
Chartered Accountants |
|
Firm Registration No.: 004721S |
|
K. RAJAGOPALAN |
| Place : Chennai |
Partner |
| Date : 30.05.2015 |
Membership No.: 14523 |
+91-9892691696
