| We have audited the accompanying financial statements of Era Infra
Engineering Limited ("the Company") which comprise the Balance Sheet as
at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year than ended and a summary of significant
accounting policies and other explanatory statements.
Management's responsibility of financial statements
The Company's Board of Directors is responsible for the matters 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 the
maintenance of adequate accounting records in accordance with the
provision of the Act for safeguarding of the assets of the Company and
for preventing and detecting the 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 internal financial control, 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.
Auditor's 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
matter's 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 standalone financial statements.
The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the standalone
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 standalone financial statements that give 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 accounting policies used and the reasonableness of
the accounting estimates made by Company's 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 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:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2015;
ii. in the case of the Statement of Profit and Loss, of the Loss for
the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matters
Attention is drawn to the following:
(a) Note No 1(b)(vi) of Financial Statements regarding recognition of
revenue based on bills submitted to Joint Ventures/ Associates though
not accounted for by such Joint Ventures/ Associates.
(b) Note No 4.1 (vi) of the Notes to Accounts regarding perfection in
creation of security under Corporate Debt Restructuring (CDR) Mechanism
as stated in the said note.
(c) Note No 7 of Financial Statements regarding non ascertaining
complete particulars (including interest payable) of dues to micro,
small and medium enterprises under MSMED Act, 2006 and non provision of
liability, if any.
(d) Note No 9 of Financial Statements regarding noncompliance of
standard condition of CDR scheme in regarding sale of fixed assets
without prior approval of CDR EG.
(e) Note No 34 of the Notes to Accounts regarding pending application
seeking approval from Central Government for excess remuneration paid
to managerial personnel.
(f) Note No 35 of Financial Statements regarding classification of
Company as Non Performing Asset (NPA) by some lenders as stated in the
said note.
(g) Note No 36 of the Notes to Accounts regarding Company's exposure
(including the exposure through its subsidiaries) in the nature of
long-term investments of Rs, 108,744.47 lacs and loans & advances of Rs,
1,631.28 lacs in its subsidiaries viz. Era Infrastructure (India)
Limited and Rampur Highway Project Limited and Company's exposure
(including the exposure through its subsidiaries) in the nature of
long-term investments of Rs, 19,658.27 lacs and loans & advances of Rs,
(2,313.43 lacs) in its Associates viz. Gwalior Bypass Project Limited
and Hyderabad Ring Road Project Limited. On the basis of book value of
these Companies, there is a diminution in the value of Rs, 30,877.42 lacs
of these investments, which in the opinion of the management is
temporary in nature.
(h) No 37 of Financial Statements with regard to non-receipt of
Confirmation of balances from Debtors, Creditors, and Advances
paid/received, equipment finance lenders and Other Liabilities. These
amounts are subject to adjustments, if any, after reconciliation and
for identification of doubtful debts/ advances, which are not
ascertainable at this stage. Our opinion is not qualified in respect
of these matters.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's 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 the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 227(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 appears from our examination of those
books.
c) the Balance Sheet, the 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 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 31 March, 2015, taken on record by the Board of Directors, none
of the directors is disqualified as on 31 March, 2015, from being
appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the other matters included in the Auditor's Report
and to our 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 23 of the
financial statements except in cases of pending under section 138 of
Negotiable Instruments Act wherein financial implication cannot be
ascertained and pending winding up petition.
ii. The company did not have any derivative contracts. In respect to
provisions for material foreseeable loses relating to long term
contracts, it is not possible to ascertain amount of foreseeable losses
due to nature of business and other various reasons such as extension
of period, quantity and also price escalation.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programmer designed to cover all the items over a
period of three years, which in our opinion is reasonable having regard
to the size of the Company and nature of its assets. Pursuant to the
programmer, a portion of the fixed assets has been physically verified
by the management during the year and no material discrepancies between
the book records and the physical inventory have been noticed.
(ii) (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable in relation to the size of the company.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the books records were not material and have been properly dealt with
in the books of accounts.
(iii) (a) The Company has granted unsecured loan to its subsidiaries,
covered in the register maintained under section 189 of the Companies
Act, 2013 ('the Act')
(b) In respect of interest free loans granted to subsidiaries covered
under section 189 of the Act, the terms of arrangement for payment of
principal are payable on demand. Accordingly, paragraph 3(iii)(a) is
not applicable to the Company.
(c) In respect of the aforesaid advances, as per the information made
available to us, there is no overdue amount exceeding Rupees One Lac as
at year end.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and with regard to execution of
contracts, sale of goods and services. However as informed to us there
is a continuous procedure to strengthen the same and the internal
controls over accounting of consumption, wastage, material
reconciliation need further strengthening.
(v) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public to
which the directives issued by Reserve Bank of India and provisions of
sections 73 to 76 of the Companies Act, 2013, including rules framed
there under, apply. Further, no order has been passed by the Company
Law Board or National Company Law Tribunal or Reserve Bank of India or
any other tribunal.
(vi) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the Rules made by the Central Government regarding
the maintenance of Cost Records under clause of sub section (1) of
section 148 of the Companies Act, 2013 and are of the opinion that
prima facie, the prescribed accounts and records have been maintained.
We have however not made a detailed examination of the records with a
view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and
according to the books and records produced before us, the company is
not regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, employees' state insurance,
income-tax, sales-tax, wealth tax, service tax, duty of customs, duty
of excise, value added tax, cuss and any other statutory dues with the
appropriate authority, as applicable to it. The arrears of outstanding
statutory dues appearing as at year end for a period of more than six
months from the date they became payable are as under:
Particulars Amount (Rs, Lacs)
Liability Under various Acts
Income Tax Act 1,054.44
Royalty under various State Royalty Acts 127.49
Employees' Provident Fund Act 434.36
Employee State Insurance Act 2.24
Finance Act, 1994 (Service Tax) 665.39
VAT/WCT under various state Acts 90.68
(b) According to the information and explanations given to us and the
records of the Company examined by us, dues of sales tax, income tax,
customs duty, wealth tax, service tax, excise duty, value added tax and
cess which have not been deposited on account of disputes and the forum
where the dispute is pending, are as under:
Name of the
Dues/ Name Disputed
Amount Period to
which Forum Where
of the Statute (Rs,in Lacs) amount
relates Dispute is
Pending
Sales Tax /
Value Added Tax
West Bengal
VAT Demand 90.94 2004-05 &
2007-08 Commercial Tax
Officer, Kolkata
Delhi VAT 428.06 2009-10 DVAT Tribunal
UP VAT 2.31 2005-06 Tribunal
Punjab Value
Added Tax Demand 1.85 2011-12 Commissioner
Name of the
Dues/ Name Disputed Amount Period to which
of the Statute (Rs, in Lacs) amount relates
Customs/ Excise
Duty
Customs Act 26.21 2007-08
Customs Act 562.48 2012-13
Excise Act 11.39 2012-13 & 2013-14
Excise Act 13.88 2012-13 & 2013-14
central
Excise Act 2.93 2011-12 & 2012-13
Excise Act 0.34 2013-14
Excise Act 3.70 2013-14
Excise Act 3.58 2012-13
Excise Act 1.45 2013-14
Excise Act 7.31 2012-13
Service Tax
Finance Act,1994 3,244.64 2007-08
Finance Act,1994 310.34 2008-09
Finance Act,1994 450.37 2008-09
Finance Act,1994 116.53 2009-10 & 2010-11
Finance Act,1994 34.16 2010-11 & 2011-12
Finance Act,1994 2,090.52 2010-11 & 2011-12
TRIBUNAL AUTHORITY
Finance Act,1994 73.11 2006-07
Income Tax
Income Tax Act, 1961 120.73 2008-09
Income Tax Act, 1961 78.55 2009-10
Income Tax Act, 1961 46.68 2010-11
Income Tax Act, 1961
(TDS) 139.60 2011-12
Royalty
Madhya Pradesh
Royalty Demand 57.38 2008-09
Madhya Pradesh
Royalty Demand 100.00 2006-07
Madhya Pradesh
Royalty Demand 20.40 2006-07
Andhra Pardesh
Royalty Demand 28.04 2004-05
Labour Cess
The Building & other
Construction 85.61 2006-07
Workers (Regulation
of Employment &
Condition of Service)
Act, 1996
Name of the Forum Where Dispute is pending
Dues/ Name
of the Statute
Customs/ Excise
Duty
Customs Act Commissioner of Customs (port),Kolkate
Customs Act Commissioner of Customs,Mumbsi
Excise Act The Additional Commissioner of central
Excise,Meerut-1
Excise Act The Attritional Commissioner of Central
Excise,Meerut-1
Excise Act The Attitiona1 Commissioner of central
Excise,Meerut-1
Excise Act Asst. Commissioner of central Excise,
Dehradun
Excise Act Asst. Commissioner of central Excise,
Dehradun
Excise Act Jt. Commissioner of central Excise,
Dehradun
Excise Act Jt. Commissioner of central Excise,
Dehradun
Excise Act Jt. Commissioner of central Excise,
Dehradun
Service Tax
Finance Act,1994 The additional commissioner of
(Adjudication), central Excise,Delhi-1
CR Building IP Estate, New Delhi
Finance Act,1994 The additional commissioner of
(Adjudication), central Excise,Delhi-1
CR Building IP Estate, New Delhi
Finance Act,1994 The additional commissioner of
(Adjudication), central Excise,Delhi-1
CR Building IP Estate, New Delhi
Finance Act,1994 The additional commissioner of
(Adjudication), central Excise,Delhi-1
CR Building IP Estate, New Delhi
Finance Act,1994 The additional commissioner of
(Adjudication), central Excise,Delhi-1
CR Building IP Estate, New Delhi
Finance Act,1994 TRIBUNAL AUTHORITY
Finance Act,1994 TRIBUNAL AUTHORITY,R.K.PURAM
Income Tax
Income Tax Act, 1961 Commoner of income Tax (appeals)
Income Tax Act, 1961 Commoner of income Tax (appeals)
Income Tax Act, 1961 Commoner of income Tax (appeals)
Income Tax Act, 1961 Commoner of income Tax (appeals)
(TDS)
Royalty
Madhya Pradesh Revenue Board, Gwalior
Royalty Demand
Madhya Pradesh Revenue Board, Gwalior
Royalty Demand
Madhya Pradesh Revenue Board, Gwalior
Royalty Demand
Andhra Pardesh Commissioner, Ujjain
Royalty Demand
Labour Cess
The Building & other Hon'able Supreme court
Construction
Workers (Regulation
of Employment &
Condition of Service)
Act, 1996
(c) According to the information and explanations provided to us, the
company has transferred to investor education and protection fund in
accordance with the relevant provisions of the Companies Act, 1956 (1
of 1956) and rules made there under within the stipulated time.
(viii) The company does not have any accumulated losses as at the end
of the year. The Company has incurred cash losses during the current
year, and immediately preceding financial year.
(ix) In our opinion and according to information and explanations given
to us, the Company has defaulted in repayment of dues to financial
institutions, bank and debenture-holder during the year. The details of
defaults are given hereunder:
Particulars Amount (Rs, Lacs) Period of Default (Days)
Interest on
Bank Term Loan 4,531.41 01-60 Days
2,341.94 61-120 Days
268.42 121-180 Days
210.92 181-240 Days
210.73 241-300 Days
207.08 301-365 Days
Principal / Term
Loans from Banks 1,258.49 01-60 Days
6,750.00 301-365 Days
(x) According to the information and explanations given to us, the
company has given guarantees for loans taken by others from banks and
financial institutions. In our opinion and according to the information
and explanations given to us, the terms and conditions of such
guarantees to banks or financial institutions are not prejudicial to
the interest of the company.
(xi) According to the information and explanations given to us, the
term loans were applied overall for the purpose for which the loans
were obtained.
(xii) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
information and explanation given by the management, we report that no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For G. C. SHARDA & CO.
Chartered Accountants
FRN:500041N
CA. Pankaj Jain
Partner
M. No. : 505948
Place : Noida
Date : 30th May, 2015
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