SRS Real Infrastructure Ltd Directors Report.

To the Members of

SRS REAL INFRASTRUCTURE LIMITED Report on the Financial Statements

We have audited the accompanying Standalone Financial Statements of SRS REAL INFRASTRUCTURE LIMITED ("the Company") which comprises the Balance Sheet as at March 31,2017, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the 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 and presentation 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 there under.

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 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 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. 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.

Opinion

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, of the state of affairs of the Company as at March 31,2017, and its Profit and its Cash Flow for the year ended on that date.

Emphasis of matter

M/s SRS Healthcare & Research Centre Limited has availed loan of 60 Crores during the F.Y. 2015-2016 and 2.69 Crores during the F.Y. 2016-2017 (against sanctioned limit of 115 Crores) from three banks on first Pari-Passu charge on all current assets present & future and entire assets financed out of banks finance, present & future of M/S SRS Healthcare & Research Centre Limited. Further the company has provided collateral security of its property namely, SRS IT Tower located at 14/5 Mathura Road, Kh no 44/22/2, 44/23, & 24/1, Near Mewla Maharajpur Metro Station, Faridabad, Haryana-121003 on first Pari-Passu basis to above three banks against the above loan, part of which has been allotted to its customers on long term lease basis.

Our opinion is not qualified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"), as amended, 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" a statement on the matters specified in paragraphs 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 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 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 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 31,2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2017 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".

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 litigations on its financial position in its Financial Statements - Refer Note 32 of Notes to the Financial Statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. Company does not having derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. The Company has provided disclosures in its Financial Statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. However, we are unable to obtain sufficient and appropriate audit evidence to report on whether the disclosures are in accordance with books of accounts and records maintained by the Company and as produced to us by the Management-Refer Note 42 of Notes to the Financial Statements.

For SVP & Associates
Chartered Accountants
Firm Reg. No. 003838N

 

(Pankaj Kumar)
Partner
Membership No. 091822
Place: Faridabad
Date : June 05, 2017

"Annexure A" to the Independent Auditors Report

Referred to in paragraph 1 under the heading Report on Other Legal & Regulatory Requirement of our report of even date to the Standalone Financial Statements of the Company for the year ended March 31,2017, we report that:-

1) Fixed Assets [Clause 3(i)]:

(a) Proper Records: The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Physical Verification: As explained to us the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its business.

No material discrepancies between the book records and the physical fixed assets have been noticed.

(c) Title Deed: The title deeds of immovable properties are held in the name of the com company, except the following case:-

Particular Total No of Cases Gross Book Value Net Book Value (Rs)
Land 1 4,16,535.00 4,16,535.00

2) Inventory [Clause 3(ii)]:

Physical Verification: We have been explained by the management that the inventory have been physically verified at reasonable interval during the year, As far as we can ascertain and according to information and explanations given to us, the discrepancies, whenever material notice on such physical verification of inventory as compared to book records were properly dealt within the books of accounts..

3) Loan given by the company [Clause 3(iii)]:

The Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (the Act). Accordingly, the provisions of clause 3 (iii) (a) to (c) of the order are not applicable to the company.

4) Loan to directors and investment by company [Clause 3(iv)]:

According to the information and explanation given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to the loan, investments made.

5) Deposits [Clause 3(v)]:

In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other provision of the Companies Act and the rules framed there under with regard to deposits accepted from the public.

6) Cost Records [Clause 3(vi)]:

We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for maintenance of cost record under section 148(1) of the Act in respect to the companys products to which said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

7) Statutory Dues [Clause 3(vii)]:

(a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities though there has been slight delays in a few cases. In case of TDS, Service Tax, WCT, Labour Cess, Value Added T ax, company is not regular in depositing undisputed statutory dues with appropriate authorities and there have been significant delays in a large number of cases.

According to the information and explanations given to us, undisputed amounts payable in respect of TDS of 63,80,056.00, Service Tax of 36,62,992.00, WCT of 2,92,305.00, Labour Cess of 25,68,813.00, Value Added Tax of 32,35,805.00 were in arrears as at March 31,2017 for a period of more than six months from the date on when they become payable.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute. However according to the information and explanation given to us, the following dues of income Tax have not been deposited by the Company on account of disputes:

(Rs In Lacs)

Nature of dues Amount (in Rs) Period to which the amount relates Amount deposited under protest (in ) Forum where dispute is pending
Income Tax 107.79 A.Y. 2014-15 - CIT(A) Gurgaon-3

8) Repayment of Loans [Clause 3(viii)]:

In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loan or borrowings to any banks and financial institutions as at balance sheet date, except in the below mentioned cases: -

In the case of Principal Payment:-

Name of the Bank Amount of Default as at the Balance Sheet date (Amount In Rs) Period of Default (Days) Remarks, if any
Canara Bank 10,50,00,000/- 364 Unpaid up to the date of Singing of Balance Sheet
Canara Bank 10,50,00,000/- 273 Unpaid up to the date of Singing of Balance Sheet
Canara Bank 10,50,00,000/- 181 Unpaid up to the date of Singing of Balance Sheet
Canara Bank 10,33,39,790/- 89 Unpaid up to the date of Singing of Balance Sheet
Indian Overseas Bank 11,25,00,000/- 364 Unpaid up to the date of Singing of Balance Sheet
Indian Overseas Bank 11,25,00,000/- 273 Unpaid up to the date of Singing of Balance Sheet
Indian Overseas Bank 11,25,00,000/- 181 Unpaid up to the date of Singing of Balance Sheet
Indian Overseas Bank 9,25,38,363/- 89 Unpaid up to the date of Singing of Balance Sheet
Central Bank of India 33,04,512/- 89 Unpaid up to the date of Singing of Balance Sheet
Central Bank of India 1,20,00,000/- 273 Unpaid up to the date of Singing of Balance Sheet
Central Bank of India 1,20,00,000/- 181 Unpaid up to the date of Singing of Balance Sheet
Central Bank of India 1,20,00,000/- 89 Unpaid up to the date of Singing of Balance Sheet
Central Bank of India 1,20,00,000/- 1 Unpaid up to the date of Singing of Balance Sheet

In the case of Interest Payment:-

Name of the Bank Amount of Default as at the Balance Sheet date (Amount In Rs) Period of Default (Days) Remarks, if any
Canara Bank 1,73,35,761/- 1-100 Unpaid up to the date of Singing of Balance Sheet
Canara Bank 1,65,21,813/- 101-200 Unpaid up to the date of Singing of Balance Sheet
Canara Bank 2,06,44,547/- 201-300 Unpaid up to the date of Singing of Balance Sheet
Canara Bank 90,29,812/- 301-365 Out of which 24,40,000/- has been paid up to the date of signing of Balance Sheet
Indian Overseas Bank 2,01,72,544/- 1-100 Unpaid up to the date of Singing of Balance Sheet
Indian Overseas Bank 2,88,76,836/- 101-200 Unpaid up to the date of Singing of Balance Sheet
Indian Overseas Bank 51,49,818/- 201-300 Unpaid up to the date of Singing of Balance Sheet
Indian Overseas Bank 1,23,57,323/- 301-365 Out of which 31,61,000/- has been paid up to the date of signing of Balance Sheet
Central Bank of India 96,67,151/- 101-200 Unpaid up to the date of Singing of Balance Sheet
Central Bank of India 31,85,959/- 201-300 Unpaid up to the date of Singing of Balance Sheet

As per information and explanation given to us the company had not taken any loan from the government. Further, the company had not issued any debenture.

9) Utilization of IPO and further public offer [Clause 3(ix)]:

Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments during the year. The term loans have been applied for the purpose for which they were raised.

10) Reporting of fraud [Clause 3(x)]:

Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

11) Approval of Managerial Remuneration [Clause 3(xi)]:

Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

12) Nidhi company [Clause 3(xii)]:

In our opinion, the Company is not a Nidhi Company. Therefore, this clause of the order is not applicable to the Company.

13) Related Party Transaction [Clause 3(xiii)]:

In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

14) Private Placements or Preferential Issues [Clause 3(xiv)]:

Based upon the audit procedures performed and the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

15) Non Cash Transactions [Clause 3(xv)]:

Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the paragraph of clause 3 (xv) of the Order are not applicable.

16) Register under RBI Act, 1934 [Clause 3(xvi)]:

The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For SVP & Associates
Chartered Accountants
Firm Reg. No. 003838N

 

(Pankaj Kumar)
Partner
Membership No. 091822

 

Place: Faridabad
Date : June 05, 2017

"Annexure B" to the Independent Auditors Report of even date on the Standalone Financial Statements of SRS REAL INFRASTRUCTURE LIMITED the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SRS REAL INFRASTRUCTURE LIMITED ("the Company") as of March 31,2017 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management 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 Internal Financial Controls over Financial 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 under the Companies Act, 2013.

Auditors Responsibility

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 Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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 Internal Financial Controls over Financial 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31,2017:

a) Company needs to strengthen the process with respect to vendor selection and analysis of quotation in relation to purchases of inventory.

A Material Weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statement will not be prevented or detected on a timely basis.

In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objective of the control criteria, the Company has maintained, in all material aspects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial were operating effectively as at March 31, 2017, 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 Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2017 Standalone Financial Statements of the company, and these material weaknesses does not affect our opinion on the Standalone Financial Statements of the company.

For SVP & Associates
Chartered Accountants
Firm Reg. No. 003838N

 

(Pankaj Kumar)
Partner
Membership No. 091822

 

Place: Faridabad
Date : June 05, 2017