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AUDITOR'S REPORT

Brahmaputra Infrastructure Ltd.

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Market Cap. (₹) 62.39 Cr. P/BV 0.39 Book Value (₹) 55.24
52 Week High/Low (₹) 29/18 FV/ML 10/1 P/E(X) 0.00
Bookclosure 30/09/2019 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2018-03 

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of BRAHMAPUTRA INFRASTRUCTURE LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March,2018, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory disclosures.

Management's Responsibility for the Standalone Financial Statements

The Company's 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 Ind AS Financial Statements that give a true and fair view of the Financial Position, Financial Performance including Other Comprehensive Income and Cash Flows , Statement of Change in Equity of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended. 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS Financial Statements based on our audit. We have taken in to 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 of Standalone Ind AS Financial Statements in accordance with the Standards on Auditing issued by Institute of Chartered Accountants of India, as 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 Ind AS financial statements. The procedures selected depend on the auditor's 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 Company's 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 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 aforesaid standalone Ind AS 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 31st March, 2018, and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

1. We draw attention to the Note No. 13.1 to the Financial Statements which describes about “No Provision made for Slow Moving WIP" amounting to Rs.62.30 Crore.

Our opinion is not modified in respect of this matter.

2. Note: on 19-06-2018. i.e. before approving of financial statements of 31 -03-2018 we have received a letter from ICICI Bank for One Time Settlement of outstanding dues under cash credit, Bank Guarantee, Working Capital, Term Loan and Funded Interest Term Loan Facilities ("Credit Facilities") amounting to Rs.6,98,91,788/- out of which Rs.2,25,00,000/- is paid by us as final settlement and Rs.1,36,794 is Cut Back by the Bank.

Our opinion is not modified in respect of this matter.

Other Matter

The comparative financial information of the Company for the year ended 31st March, 2017 and the transition date opening Balance Sheet as at 1st April, 2016 included in these Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the previous auditors whose report for the year ended 31st March, 2017 and 31st March, 2016 dated 10th June, 2017 and 30th May, 2016 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us. Our opinion on the Ind AS financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's 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 `1’a statement on the matters specified in paragraphs 3 and 4 ofthe Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we re port 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, pro per books of account as required by law have been kept by th e Company so faras it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income and the Cash Flow Statement dealt with by this Report are in agreement with the books of accounts.

(d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with the Companies(Indian Accounting Standards) Rules, 2015, as amended.

(e) On the basis of the written representations received from the directors as on 31st March 2018, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018 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 2”.

(g) With respect to the other matters to be included in the Auditor's 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 financial statement disclose the impact of pending litigation on the financial position of the refer para 1 (c) to 1 (i) and 2(b) of Note 26(C).

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

iii. No amounts were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure '1' Referred to in paragraph 1 under the heading 'Report on Other Legal & Regulatory Requirement' of our report of even date to the financial statements of the Company for the year ended March 31,2018:

1. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets, However due to frequent movement of fixed assets movable construction equipment's from site to site, actual location of such assets has not been mentioned in the records.

b. Significant Portion of Fixed Assets have been physically verified by the management during the period .which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such physical verification.

c. According to the information and explanations given to us, The title deeds of All the Immovable Properties are Held in the name of the Company.

2. As per information and explanations given to us, the inventories and construction materials at company's sites which include work in progress, have been physically verified by the management once in a year for each site. Shortage / Excess on the basis of physical verification have been duly accounted for in books of accounts which were not material, However no provision is being made for slow moving work in progress.

3. According to the information & explanation given to us, the company has granted unsecured loans to Three Companies (All Subsidiaries) covered in the registered maintained u/s 189 of the Companies Act .The maximum amount involved during the year was Rs 434.16 Lakhs and year end balance of the loans granted to subsidiaries were Rs. 356.53 Lakhs.

a. The Terms and Conditions of grant of such loans are not prejudicial to the company interest as the loans are given to Subsidiaries Companies.

b. The parties wherever applicable are regular in repayment of principal amount as stipulated.

c. Not Applicable as there is no overdue amount.

4. In our opinion and according to the information and explanation provided to us, provision of section 185 and 186 of the Companies Act, 2013 and in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and guarantees, and securities given has been complied with by the company.

5. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

6. The Maintenance of Cost Records has been prescribed by the Central Govt. under section 148(1) of the Companies Act, 2013 vide Companies (Cost Records and Audit) Rules, 2014 and we are of the opinion that prima facie the prescribed records were made and maintained. We have not, however, made a detailed examination of the same.

7. a) According to the information and explanations given to us, the Company is not regular in depositing undisputed statutory dues with appropriate authorities such as TDS, Service Tax, Interest on TDS, Interest on Service Tax etc. Dues applicable to the Company.

b) According to information and explanations given to us, the detail of undisputed amounts payable in respect of Service Tax, Sales Tax, TDS etc. are in arrears as at 31st March, 2018 for a period of more than six months from the date of they became payable is as under;

Nature of Amount

Amount Outstanding as on 31st March, 2018 for More than 6 Months from the date become payable

Service Tax

Rs.643.82 Lakhs

TDS

Rs.15.85 Lakhs

Interest on TDS Payable

Rs.105.21 Lakhs

Nature of Amount

Amount Outstanding as on 31st March, 2018 for More than 6 Months from the date become payable

Interest on Service Tax Payable

Rs.43.61 Lakhs

Vat / Entry Tax / WCT

Rs.537.24 Lakhs

Provident Fund/ESI and Prof. Tax

Rs.8.77 Lakhs

ROC Fees Payable

Rs.1.40 Lakhs

c) According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute except in respect of the following disputed liabilities pending for adjudication at different appellate authorities:

Name ofthe statute

Nature of the dues

Amount (Rs. in Lacs)

Forum where dispute is pending

West Bengal Vat Act

Vat Liability for Project Executed in West Bengal

98.31

Pending before Commissioner

UP Vat Act

Vat Liability for Lucknow Project/Penalty for Non Submission of C Form

168.11

Pending before Commissioner

Service Tax

Servloe tax Demand including penalty raised by Service tax Department

710.62

Pending before Additional District Judge of Saket Court (Delhi)

Income Tax

Demand including interest u/s 153A/143(3), raised by Income Tax Department

474.52

2.26 is pending before ITAT and 472.25 is pending before CIT

Income Tax

Penalty for late filing of TDS returns

3.50

Pending before CIT

Income Tax

Demand for Penalty

0.70

Pending before CIT

8. As per Books and Records maintained by the company and according to the information and explanations given to us, the company has defaulted in repayment of dues to financial institutions and banks. Such continuing default as on balance sheet date were of Rs.5812.75 Lacs as reported in note no. 3.2 to financial statements. Month wise detail and amount of Such Defaults are attached as per Annexure 3

9. According to the records of the company examined by us and as per the information and explanations given to us, term loans taken were applied for the purposes for which those are raised. The company has not raised any money by way of initial public offer of further public offer (including debt instruments).

10. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Financial Statements and according to the information and explanation provided by the management, we report that no fraud by the Company or no fraud on the company by the officers and employees of the Company has been noticed or reported during the year.

11. According to the Information and explanation given to us, Managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act.

12. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

13. All transactions with the related parties are in compliance with sections 188 and 177 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards and Companies Act, 2013.

14. During the year under review, the Company has not made any preferential allotment of private placement of shares of fully or partly convertible debentures.

15. According to 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 provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

16. According to the information and explanations given to us and in our opinion the company is not required to be registered under section 45-IAof the Reserve Bank of India Act, 1934.

Report on 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 Brahmaputra Infrastructure Limited (“the Company”) as of March 31,2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's 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 company's 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 Company's 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 auditor's judgement, 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 Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's 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 company's 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 company's 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.

Opinion

According to the information and explanation given to us, in our opinion, the Company has, in all material aspects, an adequate internal financial control system over financial reporting and such internal financial controls were operating effectively as at March 31, 2018, 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.

For NAVEEN ATM ARAM GARG & CO

CHARTERED ACCOUNTANTS

Firm Registration. No. 324383E

(NAVEEN GARG)

PROPRIETOR

M. No. 060338

PLACE: Guwahati

DATED:03-07-2018

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