1. We have audited the attached Balance Sheet of Supreme
Infrastructure India Limited (the ''Company''), as at March 31, 2011, and
also the Profit and Loss Account and the Cash Flow Statement for the
year ended on that date annexed thereto (collectively referred as the
''financial statements''). 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 the 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 (the
''Order'') (as amended), issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956
(the ''Act''), we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to above, we
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
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
c. The financial statements dealt with by this report are in agreement
with the books of account;
d. On the basis of written representations received from the
directors, as at March 31, 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as at
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub- section (1) of section 274 of the Act;
e. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements dealt with by
this report comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Act and the Rules framed there
under and 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, in the case of:
i) the Balance Sheet, of the state of affairs of the Company as at March
ii) the Profit and Loss Account, of the profit for the year ended on
that date; and
iii) the Cash Flow Statement, of the cash flows for the year ended on
Annexure to the Auditors'' Report of even date to the members of Supreme
Infrastructure India Limited on the financial statements for the year
ended March 31, 2011
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In our opinion, this periodicity of physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
(c) In our opinion, a substantial part of fixed assets has not been
disposed off during the year.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has not granted any loan, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly, the provisions of clauses
4(iii)(b) to (d) of the Order are not applicable.
(e) The Company has taken interest free unsecured loans from a director
and a company covered in the register maintained under section 301 of
the Act. The maximum amount outstanding during the year was Rs
372,835,917 and the year-end balance was Rs 29,436,545.
(f) These interest free loans, as represented by the management, are in
the nature of demand loans and therefore repayable on demand. In our
opinion, other terms and conditions on which such loans have been
obtained are prima facie not prejudicial to the interest of the
(g) The loans taken are repayable on demand. As informed, the Company
has paid the loan and advance amount as and when demanded by the
lender, thus there is no default on the part of the Company.
(iv) In our opinion, 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 for the sale
of goods and services.
(v) (a) In our opinion, the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Act have been so entered.
(b) In our opinion, the transactions made in pursuance of such
contracts or arrangements and exceeding the value of rupees five lakhs
in respect of any party during the year have been made at prices which
are reasonable having regard to prevailing market prices at the
(vi) In our opinion, the Company has not accepted any deposits from the
public within the meaning of sections 58A and 58AA of the Act and the
Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the
provisions of clause 4(vi) of the Order are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii)To the best of our knowledge and belief, the Central Government
has not prescribed maintenance of cost records under clause (d) of
sub-section (1) of section 209 of the Act, in respect of Company''s
products. Accordingly, the provisions of clause 4(viii) of the
Order are not applicable.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth-tax, service-tax, customs duty, excise duty, cess and
other material statutory dues, as applicable, have not been regularly
deposited with the appropriate authorities and there have been
significant delays in a large number of cases. No undisputed amounts
payable in respect of the above mentioned taxes were outstanding, at
the year end for a period of more than six months from the date they
(b) There are no dues in respect of income tax, sales tax, wealth tax,
service tax, customs duty, excise duty and cess that have not been
deposited with the appropriate authorities on account of any dispute.
(x) In our opinion, the Company has no accumulated losses at the end of
the financial year and it has not incurred cash losses in the current
and the immediately preceding financial year.
(xi) In our opinion, the Company has not defaulted in repayment of dues
to a financial institution or a bank or debenture holders during the
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities. Accordingly, the provisions of
clause4(xii) of the Order are not applicable.
(xiii)The Company is not a chit fund or a nidhi/ mutual benefit fund/
society. Accordingly, the provisions of clause 4(xiii) of the Order are
(xiv)The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of the Order are not applicable.
(xv) In our opinion, the Company has not given any guarantees for loans
taken by others from banks or financial institutions. Accordingly, the
provisions of clause 4(xv) of the Order are not applicable.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which the loans were obtained.
(xvii) In our opinion, no funds raised on short-term basis have been
used for long-term investment.
(xviii)The Company has made preferential allotment of shares to a party
covered in the register maintained under section 301 of the Act. In our
opinion, the price at which shares have been issued is not prejudicial
to the ineterest of the Company.
(xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions of clause 4(xix) of
the Order are not applicable.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
(xxi) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For Walker, Chandiok & Co For Shah & Kathariya
Chartered Accountants Chartered Accountants
Firm Registration No: 001076N Firm Registration No: 115171W
perAmynJassani per P. M. Kathariya
Membership No: F-46447 Membership No: F-31315
Place: Mumbai Place: Mumbai
Date: 27 July, 2011 Date: 27 July, 2011