AUDITOR
TO THE MEMBERS ARSS INFRASTRUCTURE PROJECTS LIMITED
1. We have audited the attached Balance Sheet of ARSS Infrastructure Projects Limited,
as at 31st March 2012, the Profit and Loss Account and the Cash flow statement
for the year ended on that date annexed thereto. These financial statements are the
responsibility of the Company’s Management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in
India. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the
Companies (Auditors’ Report)(Amendment)Order, 2004( hereinafter referred to as the
order) issued by the Central Government of India in terms of sub-section (4A) of section
227 of the Companies Act 1956, we enclose in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure I referred to in paragraph 3 above, we
report that:
4.1 We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit.
4.2 Profit from HCIL-Adhikaria- ARSSPL JV has been considered on the basis of
Provisional Accounts as on 31.03.2012 and also for earlier years instead of audited
accounts, which is not in accordance with Accounting Standard – 27, "Financial
Reporting of Interest in Joint Ventures" issued by The Institute of Chartered
Accountants of India.
4.3 In our opinion, the Company has kept proper books of accounts as required by law so
far as appears from our examination of those books. 4.4 The Balance Sheet, Profit and Loss
Account and Cash Flow Statement dealt with by this report, are in agreement with the books
of account. 4.5 In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow
Statement have been drawn up in accordance with Accounting Standards (AS) referred to in
Sub- section (3C) of Section 211 of the Companies Act, 1956 except as stated in Para
– 4.2 above. 4.6 According to the information and explanations provided to us and on
the basis of written representations received from the Company, we report that none of the
Directors are disqualified as on 31.03.2012 from being appointed as a director in terms of
clause (g), sub section (i) of section 274 of the Companies Act, 1956.
4.7 In our opinion and to the best of our information and according to the explanations
provided to us, the said accounts, subject to the observations in para 4.2 above regarding
consideration of provisional Profit and investment in one of the Joint Venture, give the
information required by the Companies Act, 1956 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 Balance Sheet, of the state of affairs of Company as at 31st March, 2012.
ii. In the case of Profit and Loss Account, of the Loss of the Company for the year ended
on that date and. iii. In the case of Cash Flow Statement, of the Cash Flows for the year
ended on that date.
|
For P. A. & Associates |
|
Chartered Accountants |
|
Firm Regn. No – 313085E |
|
(CA. B. N. Dash) |
| Bhubaneswar |
Partner |
| The 14th day of May, 2012 |
M. No. 062142 |
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
[Re : ARSS Infrastructure Projects Ltd. ( "the Company")]
i) In respect of its Fixed Assets
a) The Company has maintained proper records showing full particulars including
quantitative details and situation of Fixed Assets.
b) According to the information and explanations provided to us, all the fixed assets
have been physically verified by the management in a phased periodical manner, which in
our opinion, is reasonable having regard to the size of the Company and the nature of its
assets. No material discrepancies were noticed on such physical verification.
c) In our opinion the Company has not disposed off a substantial part of its fixed
assets during the year and hence the status of the Company as a going concern is not
affected.
ii) In respect of its Inventories
a) As explained to us, inventories have been physically verified by the management
during the year. In our opinion, the frequency of verification is reasonable having regard
to the size of the Company and nature of its business.
b) According to the information and explanation provided to us, the procedure of
physical verification of inventories followed by the management in our opinion are
reasonable and adequate in relation to the size of the Company and the nature of its
business.
c) On the basis of our examination, we are of the opinion that the Company is
maintaining proper records of inventory. The discrepancies noticed on verification between
the physical stocks and the book records were not material and have been properly dealt
with in the books of account.
iii)
a) According to the information and explanations provided to us, the Company has
granted loan to one party covered in the register maintained under section 301 of the Act.
The maximum amount involved during the year was Rs 9.20 lacs and the balance at the end of
the year is Rs 8.45 lacs.
b) In our opinion and according to the information and explanations provided to us, the
aforesaid loan is interest free and other terms and conditions of the loan taken by the
party, were not prima facie prejudicial to the interest of the Company.
c) The said interest free loan is repayable on demand and there is no repayment
schedule.
d) The Company had taken loan from two parties covered in the register maintained U/s
301 of the Act. The maximum amount involved during the year was Rs 250.00 lacs and the
balance at the end of the year is Rs 250.00 lacs.
e) In our opinion and according to the information and explanations provided to us, the
aforesaid loan is interest free and other terms and conditions of the loan taken by the
Company , were not prima facie prejudicial to the interest of the Company.
f) The said interest free loans are repayable on demand and there is no repayment
schedule.
iv) In our opinion and according to the information and explanations provided to us,
there is an adequate internal control system commensurate with the size of the Company and
the nature of its business for the purchase of inventory and fixed assets and also for
sale of goods and services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control system.
v) a) According to the information & explanation provided to us, we are of the
opinion that the particulars of the contracts or arrangements that need to be entered in
to the register, maintained U/s 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations provided to us, the
transactions (excluding loans reported under paragraph iii above) exceeding the value of
Rs 5 lacs in respect of any party during the year have been made at prices which are prima
facie reasonable having regard to the prevailing market prices at the relevant time, where
such market prices are available.
vi) In our opinion and according to the information and explanations provided to us,
the Company has not accepted any deposit from public within the meaning of section 58A and
58AA or any other provisions of the Act and rules framed there under.
vii) In our opinion and according to the information and explanations provided to us
the Company has an internal audit system commensurate with the size of Company and the
nature of its business.
viii) According to the information and explanations provided to us, the Central
Government has not prescribed the maintenance of cost records under section 209(1) (d) of
the Companies Act, 1956 for any of the products of the Company.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
[Re : ARSS Infrastructure Projects Ltd. ( "the Company")]
ix) a) According to the information and explanations provided to us the Company is
irregular in deposit of undisputed statutory dues including Provident Fund, Employees
State Insurance, Income Tax, VAT and Service Tax.
b) According to the information and explanation provided to us, in our opinion, no
undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st
March, 2012 for a period of more than six months from the date they became payable except
service tax amounting to Rs 70.41 lacs.
c) According to the information & explanation provided to us and on basis of the
records of the Company examined by us, the particulars of sales tax, income tax and entry
tax as at 31st March, 2012 which have not been deposited on account of pending disputes
are as under.
( Rs in lacs)
| Forum where disputes are Pending |
Period to which the dispute relates. |
Amount of demand |
| 1. Orissa Sales Tax Act. |
|
|
| Appellate Tribunal |
2000-01 & 2004-05 |
52.11 |
| Commissioner of Commercial Taxes |
2000-01 to 2002-03 |
31.86 |
| 2. Orissa VAT Act |
|
|
| Commissioner of Commercial Taxes |
2004-05 to 2006-07 |
14.51 |
| Joint Commissioner of Commercial Taxes |
2004-05 to 2006-07 & 2010-11 |
18.70 |
| 3. Orissa Entry Tax Act |
|
|
| Joint Commissioner of Commercial Taxes |
2005-06 to 2006-07 |
24.60 |
| Commissioner of Commercial Taxes |
2005-06 to 2006-07 |
9.84 |
| 4. Central sales Tax Act |
|
|
| Commissioner of Commercial Taxes |
2008-09 |
791.11 |
| 5. Income Tax Act, 1961 |
|
|
| CIT(Appeal) |
2006-07 to 2007-08 |
151.07 |
| 6. Andhra Pradesh VAT Act |
|
|
| Appelate Deputy Commissioner(CT) |
2008-09 to 2010-11 |
28.63 |
x) The Company does not have accumulated losses at the end of the financial year and
has not incurred cash losses during the financial year covered by our audit and in the
immediately preceding financial year.
xi) As at the Balance sheet date, Interest and principal amounting to Rs 249.29 crores
due to the financial institutions and banks have not been paid by the Company.
Accordingly, the loan account with State Bank of India, and State Bank of Bikaner and
Jaipur has been declared as Non Performing Assets.
xii) According to the information and explanations provided to us, the Company has not
granted any loans or advances on the basis of security by way of pledge of shares,
debentures or other securities.
xiii) In our opinion, the Company is not a chit fund or nidhi/mutual benefit
fund/society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Order are not applicable to the Company.
xiv) As explained to us and on the basis of information provided to us, the Company is
not dealing in shares, securities, debentures and other investments. Accordingly, the
provisions of clause
(xiv) of paragraph 4 of the order are not applicable to the Company.
xv) In our opinion and according to the information and explanations provided to us ,
the terms and conditions of guarantees given by the Company for loans taken by others from
banks are not prima facie prejudicial to the interest of the Company.
xvi) In our opinion and according to the information and explanations provided to us,
the term loans have been applied for the purpose for which they were obtained.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
[Re : ARSS Infrastructure Projects Ltd. ( "the Company")]
xvii) According to the information and explanations provided to us and on an overall
examination of the books of accounts of the Company, we are of the opinion that no funds
raised on short-term basis have been utilised for long term investment.
xviii) According to the information and explanations provided to us, during the year,
the Company has not made any preferential allotments of shares to parties covered in the
register maintained under section 301 of the Act. Accordingly, the provisions of clause
(xviii) of paragraph 4 of the order are not applicable to the Company. xix) During the
period covered by our audit report, the Company has not issued any debentures.
Accordingly, the provisions of clause
(xix) of paragraph 4 of the order are not applicable to the Company.
xx) The Company has not raised any monies by way of public issues during the year.
xxi) To the best of our knowledge and belief and according to the information and
explanation provided to us, no material fraud on or by the Company has been noticed or
reported during the course of our audit.
|
For P. A. & Associates |
|
Chartered Accountants |
|
Firm Regn. No – 313085E |
|
(CA. B. N. Dash) |
| Bhubaneswar |
Partner |
| The 14th day of May, 2012 |
M. No. 062142 |