Mar 31, 2016
Report on the Financial Statements
We have audited the accompanying financial statements of Petron Engineering Construction Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the 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 and presentation of these 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these 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 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 financial statements.
Basis for qualified Opinion
Attention is drawn to:
i. Note no. 32 in respect of certain suspended / delayed contracts as of 31st March, 2016 , trade receivables of Rs.1,923 lacs (net of mobilization advance of Rs.2,934 lacs) ( FY ended 31st March 2015 Rs.1,501 lacs net of mobilization advance of Rs.4,240 lacs) and unbilled revenue of Rs.6,256 lacs (FY ended 31st March 2015 Rs.7,756 lacs) receivables from customers are pending confirmation/ negotiation; trade payables w.r.t. these stated customers aggregated to Rs.819 lacs (FY ended 31st March 2015 Rs.1,323 lacs) are subject to negotiation/ confirmation, where we are unable to comment on the same and its corresponding impact on profit and assets/liabilities as at that date. This matter was also qualified in the report of the predecessor auditors on the financial statements for the year ended 31st March 2015.
ii. Note no. 33 (a), the company has recognized revenue of Rs.1,353 lacs during earlier periods (till 31st March 2015 Rs.2,555/- lacs) on account of cost overruns on certain contracts, pending acceptance / confirmation from customers and our inability to comment on the amounts ultimately receivable in respect of these contracts and its impact on the reported profit for the year ended 31st March'' 2016 and corresponding assets as on date. This matter was also qualified in the report of the predecessor auditors on the financial statements for the year ended 31st March'' 2015.
iii. Note no. 33 (b) regarding recognition revenues of Rs.1,621 lacs (till 31st March 2016 Rs.2,922 lacs) during the year ended 31st March 2016, on account of cost overruns on certain contracts, which are not in accordance with the principles set out in the Accounting Standards AS-7 ''Construction Contracts''. Accordingly the Revenue and profit for the year ended 31st March2016 is higher by Rs.1621 lacs and also balance in retained earnings and unbilled revenue balance as at 31st March 2016 is higher by Rs.2,922 lacs (as at 31st March 2015 by Rs.1,301 lacs). This matter was also qualified in the report of the predecessor auditors on the financial statements for the year ended 31st March 2015.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid 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, 2016 and its profit and its cash flows for the year ended on that date.
Emphasis of Matters
Attention is drawn to note no. 43 (b):
The balances of certain trade receivable, other liabilities and loan & advances are subject to confirmation/reconciliation, where the management is confident that there will not be any material impact on confirmation /reconciliation on profit for the year.
Our opinion is not modified in respect of matter stated above.
Report on Other Legal and Regulatory Requirements
1. A s 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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the Annexure ''A'' a statement on the matters specified in the paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) W e 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) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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) The matters described in the basis for qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
(f) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;
(g) As required by section 143(3)(i) of the Companies Act, 2013, and based on the checking of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, our report on the Internal Financial Controls over Financial Reporting is as per Annexure ''B'';
(h) 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 Company has disclosed the impact of pending litigations on its financial position in its financial statements
- Refer Note no. 31 and Note No. 35 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 including derivative contracts - Refer Note No. 7 to the financial statements. The Company does not have any derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure-A referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date on the Standalone Financial Statements of Petron Engineering Construction Ltd. for the year ended 31st March, 2016
1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of Physical Verification of its Fixed assets by which fixed asset are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.
(c) Ts per the records and information and explanations given to us, title deeds of immovable properties are in the name of the Company.
2. T he inventories of the Company, have been physically verified by the management at reasonable intervals and the procedures of physical verification of inventory followed by the Management are reasonable in relation to the size of the Company and nature of its business. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.
3. According to the records and information and explanations made available to us, the Company has not granted any loans, secured or unsecured to companies, firms, LLP and other parties covered in the register maintained under section 189 of the Companies Act, 2013.
4. According to the information, explanations and representations provided by the management and based upon audit procedures performed, the Company has not granted any loans, investments, guarantees and security; accordingly, the provisions of Clause 3(iv) of the Order are not applicable.
5. In According to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Section 73 to76 of the Act or any other relevant provisions of the Act and the rules framed there under. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or other tribunal in this regard.
6. W e have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148 (1) of the Act, related to the manufacture of Machinery and Mechanical appliances and parts thereof and execution of projects having application of Mechanical Engineering, Fabrication, Construction and Refractory products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate or complete.
7. a) According to the records of the Company, undisputed statutory dues including income tax, custom duty, excise duty and other material statutory dues have generally been regularly deposited with the appropriate authorities though there have been delay in some cases of tax deducted at source, provident fund, employees'' state insurance, service tax and sales-tax and there were no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2016. However, there was one instance where provident fund amounting to Rs.42,14,889/- was paid post resolution of technical issues with delay of 4 days.
b) According to the records and information & explanations given to us, there are no dues in respect of Wealth Tax, Duty of Custom that have not been deposited with the appropriate authorities to the extent applicable on account of any dispute and the dues in respect of Service Tax, Duty of Excise, Income Tax, VAT or cess that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below: -
Name of Statute |
Nature of Dues |
Period |
Amount (in Rs.) |
Forum where dispute is pending |
Finance Act, 1994 |
Service Tax |
2005-09 |
4,68,22,758 |
CESTAT, Ahmedabad |
Finance Act, 1994 |
Service Tax |
2007-08 |
251,566 |
Deputy Commissioner (Appeals) Central Excise, Panipat |
Finance Act, 1994 |
Service Tax |
2008-09 |
184,672 |
Commissioner (Appeals) of Central Excise, Haldia |
Finance Act, 1994 |
Service Tax |
2006-07 |
2,475,194 |
CESTAT, New Delhi |
Central Excise Act, 1944 |
Excise Duty |
2001-02 |
252,640 |
CESTAT, Navi Mumbai |
Central Excise Act, 1944 |
Excise Duty |
2004-05 |
219,156 |
CESTAT, Vadodara |
Name of Statute |
Nature of Dues |
Period |
Amount (in Rs.) |
Forum where dispute is pending |
Central Sales Tax, 1956 |
Central Sales Tax |
2006-07 |
807,261 |
Joint Commissioner Sales Tax, West Bengal |
Bombay Sales Tax Act, 1959 |
Sales Tax |
2004-05 |
169,822 |
Joint Commissioner of Sales Tax (Appeals) |
West Bengal Value Added Tax |
VAT |
2007-08 |
2,589,556 |
Joint Commissioner of Commercial Taxes |
West Bengal Value Added Tax Act, 2003 |
VAT |
2009-10 |
17,483,088 |
Joint Commissioner of Sales Tax |
Central Sales Tax (West Bengal) Rules, 1958 |
Central Sales Tax |
2009-10 |
1,514,805 |
Joint Commissioner of Sales Tax |
West Bengal Value Added Tax Act, 2003 |
VAT |
2010-11 |
16,694,017 |
Joint Commissioner of Sales Tax |
Building and Other Construction Workers'' Welfare Cess Act, 1996 |
Labour Welfare Cess |
2007-08 |
3,970,102 |
Bihar Building and Other Construction Workers'' Welfare Board |
Income Tax Act, 1961 |
Income Tax |
2011-12 |
264,790 |
Commissioner of Income-tax (Appeals), Mumbai |
Orissa Value Added Tax, 2004 |
VAT |
2002-03 |
244,655 |
Sales Tax Authority, Angul, Orissa |
Income Tax Act, 1961 |
Income Tax |
2009-10 |
29,048,080 |
Comm. of Income Tax (Appeals), Mumbai |
(This is to be read with Note No.35)
8. In our opinion, on the basis of audit procedures and according to the information and explanations given to us and based on the confirmation received, the Company has not defaulted in repayment of loans and borrowings to banks. The company did not have any outstanding dues in respect of debentures, financial institutions and government (both State and Central) during the year.
9. On the basis of information and explanations given to us, term loans have been applied for the purposes for which they were obtained. The company did not raise any money by way of initial / further public offer.
10. Based on the audit procedure performed and on the basis of information and explanations provided by the management, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the course of the audit.
11. On the basis of records and information and explanations made available and based on our examination of the records of the company, the company has paid/ provided managerial remuneration, in accordance with the requisite approvals mandated under Section 197 read with Schedule V of the Act.
12. The Company is not a chit fund or a nidhi /mutual benefit fund /society, therefore, the provisions of clause 3 (xii) of the said Order are not applicable to the Company, hence we are not offering any comment.
13. As per the information and explanations and records made available by the management of the Company and audit procedure performed, for the related parties transactions entered during the year, the Company has complied with the provisions of Section 177 and 188 of the Act, where applicable. As explained and as per records / details the related parties transactions have been disclosed as per the applicable Accounting Standards.
14. According to the information and explanations given to us, the Company has not made any preferential allotment of shares or fully / partly convertible debentures during the year in terms of provisions of Section 42 of the Act.
15. On the basis of records made available to us and according to information and explanations given to us, the Company has not entered into non-cash transactions with the directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
16. The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934, as the provision of section is not applicable to the Company.
For LODHA & CO.,
Chartered Accountants
Firm''s Registration No. 301051E
N.K. Lodha
Place: New Delhi Partner
Date: 31st May,2016 Membership No.085155
Mar 31, 2015
We have audited the accompanying financial statements of Petron
Engineering Operations Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the maters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with 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 of 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 the design, implementation and
maintenance of adequate 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 financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and maters
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 in accordance with the Standards on Auditing, issued by the
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 disclosures in the 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 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 effectiveness of such controls. An
audit also includes evaluating the appropriateness of 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 financial statements.
Basis for Qualified Opinion
a) We report that in respect of certain contracts, as at March 31,
2015, trade receivables and unbilled revenue of Rs. 1,501 Lacs (net of
provisions and mobilization advance of Rs. 4,240 Lacs) and Rs. 7,756
Lacs respectively are doubtful of recovery as the said contracts are
under suspension or are delayed and the balances receivable from the
customers are subject to final confirmation due to pending
negotiations. Similarly, the trade payables to vendors in respect of
the above mentioned suspended contracts as recorded in the books
aggregating Rs. 1,323 Lacs are also subject to negotiations and final
confirmation. In the absence of such confirmations and pending final
outcome of the negotiations, we are unable to comment upon the amounts
ultimately receivable/payable in respect of this contract and the
consequential impact on the reported profit for the year ended March
31, 2015 and corresponding assets and liabilities as at that date. Our
Audit Report on the financial statements for the year ended March 31,
2014 was also modified in respect of the above mater.
b) We report that the Company has recognized revenue of Rs. 2,555 Lacs
(during earlier periods) on cost overruns arising due to design changes
and delay in completion on certain contracts, without change
orders/customer acceptance in respect of the same. Due to the
uncertainty over ultimate collection and recoverability of the said
amounts, we are unable to comment on the amounts ultimately receivable
in respect of these contracts including consequential adjustments that
may be required in this regard and consequential impact on the reported
profit for the year ended March 31, 2015 and corresponding assets as at
that date. Our audit report on the financial statements for the year
ended March 31, 2014 was also modified in respect of the above mater.
c) We report that the Company has recognized revenues of Rs. 1,301 Lacs
during the year ended March 31, 2015 on cost overruns arising due to
design changes, contract interpretation issues and delay in completion on
certain contracts, which in our opinion, should not have been
recognized because they are not in accordance with the revenue
recognition principles set out in the Accounting Standard AS 7
Operations Contracts. Accordingly the revenue, profit and unbilled
revenue balance as of and for the year ended March 31, 2015 would be
lower by Rs. 1,301 Lacs.
Qualified opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the maters
described in sub-paragraphs (a) and (b) of the Basis for Qualified
Opinion paragraph above and except for the effects of the mater
described in sub-paragraph (c) of the Basis for Qualified Opinion
paragraph above, the aforesaid 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, 2015, of
its profit and its cash flows for the year ended on that date.
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 1, a
statement on the maters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and except for the maters described in the Basis for
Qualified Opinion paragraph, obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
(b) Except for the effects of the maters described in the Basis for
Qualified Opinion paragraph, in our opinion proper books of account as
required by law have been kept by the Company so far as it appears from
our examinaton of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) Except for the effects of the mater described in the Basis for
Qualified Opinion paragraph above, 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) The maters described in the Basis for Qualified Opinion paragraph
above, in our opinion, may have an adverse effect on the functoning of
the Company;
(f) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of Section 164 (2) of the Act;
(g) The qualification relating to the maintenance of accounts and other
maters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
(h) With respect to the other maters 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 Company has disclosed the impact of pending litigations on its
financial positon in its financial statements  Refer Note 31 and Note 35
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 including derivative contracts  Refer Note 7 to the
financial statements. The Company does not have any derivative contracts
for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure referred to in paragraph 1 under the heading "Report on other
legal and regulatory requirements" of our report of even date
Re: Petron Engineering Operations Limited ('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 programme 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 the nature of its assets. Pursuant to the
programme, certain fixed assets were physically verified by the
management during the year and no material discrepancies have been
noticed on such verification.
(ii) (a) The management has conducted physical verification of inventory
at reasonable intervals during the year.
(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) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) and
(b) of the Order are not applicable to the Company and hence not
commented upon.
(iv) In our opinion and according to the information and explanations
given 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 for the sale of goods.
However, the internal control system for cost estimation process needs to
be strengthened in order to correct variances in costs estimated and
costs subsequently incurred, to make it commensurate with the size and
nature of the operations of the Company. In our opinion, this is a
continuing failure to correct a major weakness in the internal control
system.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 148 (1) of the Act, related to
the manufacture of Machinery and Mechanical appliances and parts
thereof and execution of projects having application of Mechanical
Engineering, Fabrication, Operations and Refractory products, and are
of the opinion that prima facie, the prescribed accounts and records
have been made and maintained. We have not, however, made a detailed
examination of the same.
(vii) (a) Undisputed statutory dues including income-tax, wealth tax,
customs duty, excise duty, value added tax, cess and other material
statutory dues have generally been regularly deposited with the
appropriate authorities though there have been serious delays in large
number of cases of tax deducted at source, provident fund, employees'
state insurance, service tax and sales-tax.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income-tax, wealth-tax, service tax, sales-tax,
customs duty, excise duty, value added tax, cess and other material
statutory dues were outstanding, at the year end, for a period of more
than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, value added tax and cess on account of any dispute, are as
follows:
Name of the Statute Nature of Dues Year Amount
(Rs. In
Lacs)
Finance Act, 1994 Service Tax (net of Rs 24 2004-06 71
Lacs paid)
Finance Act, 1994 Service Tax (net of Rs 61 2005-09 428
Lacs paid)
Finance Act, 1994 Service Tax 2007-08 3
Finance Act, 1994 Service Tax 2008-09 2
Finance Act, 1994 Service Tax (net of Rs 2006-07 25
0.98 Lacs paid)
Name of Statute Forum where dispute is pending
Finance Act,1994 Commissioner of Customs, Central
Excise and Service Tax, Rohtak
Finance Act.1994 CESTAT,Ahmedabad
Finance Act,1994 Deputy Commissioner (Appeals)
Central Excise, Panipat
Finance Act,1994 Commissioner (Appeals) of Central
Excise, Haldia
Finance Act,1994 Joint Commissioner of Customs,
Central Excise and Service Tax,
Bhopal
Name of Statute Nature of Dues Year Amount
(Rs.In Lacs)
Central Excise Act, Excise Duty (net of Rs 2001-02 3
1944 0.50 lacs paid)
Central Excise Act, Excise Duty (net of Rs 2004-05 2
1944 1.69 Lacs paid)
Central Sales Tax, Central Sales Tax 2006-07 8
1956
Bombay Sales Tax Sales Tax (net of Rs
2.35 2004-05 2
Act, 1959 Lacs paid)
West Bengal Value VAT 2007-08 26
Added Tax Act, 2003
West Bengal Value VAT 2009-10 182
Added Tax Act, 2003
Rajasthan Entry
Tax - VAT (net of Rs
4.89 Lacs 2008-09 8
Goods Act, 2003 paid)
Central Sales Central Sales Tax 2009-10 15
Tax (West Bengal)
Rules, 1958
West Bengal Value VAT 2010-11 167
Added Tax Act, 2003
West Bengal Value VAT 2011-12 3
Added Tax Act, 2003
Building and Other Labour Welfare Cess 2007-08 40
Constructon
Workers' Welfare
Cess Act, 1996
Income Tax Act,1961 Income Tax 2011-12 3
Income Tax Act,1961 Tax Deducted at Source 2006-11 39
Name of Statute Forum Where dispute is pending
Central Excise Act, CESTAT, Navi Mumbai
1944
Central Excise Act, CESTAT, Vadodara
1944
Central Excise Act, Deputy Commissioner Sales Tax,
1956 West Bengal
Bombay Sales Tax Joint Commissioner of Sales Tax
Act,1959 (Appeals)
West Bengal Value
Addded Tax,2003 Joint Commissioner of Commercial
Taxes
West Bengal Value
Added Tax,2003 Joint Commissioner of Sales Tax
Rajastan Entry Tax- Deputy Commissioner (Appeals)
Goods Act,2003 Sales Tax, Kota
Central Sales Tax Joint Commissioner of Sales Tax
Act(West Bengal)
Rules,1958
West Bengal Value
Added Tax Act,2003 Joint Commissioner of Sales Tax
West Bengal Value
Added Tx Act,2003 Commissioner (Appeals) Sales Tax,
West Bengal
Building and Other Bihar Building and Other
Operations Operations Workers' Welfare
Worker's Welfare Board
Cess Act,1996
Income Tax Act,1961 Commissioner of Income-tax
(Appeals), Mumbai
Income Tax Act,1961 Commissioner of Income-tax
(Appeals), Mumbai
(d) According to the information and explanations given to us, the amount
required to be transferred to investor education and protection fund in
accordance with the relevant provisions of the Companies Act, 1956 (1
of 1956) and rules made thereunder has been transferred to such fund
within time.
(viii) Without considering the consequential effects, if any, of the
maters stated in paragraph (a), (b) and (c) of the Basis of Qualified
Opinion paragraph in our auditors' report, the Company has no
accumulated losses at the end of the financial year and it has not
incurred cash losses in the current and immediately preceding fnancial
year.
(ix) Based on our audit procedures and as per the information and
explanations given by the management, there have been 8 instances of
delays in repayment of dues to a bank aggregating to Rs. 494 Lacs
(delays ranging from 03 to 30 days). The delays observed were for the
period up to September 30, 2014 and dues have been fully paid by the
Company before September 30, 2014. The Company did not have any
outstanding dues in respect of a financial institutions or debentures
during the year.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xi) Based on information and explanations given to us by the management,
term loans were applied 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
the information and explanations given by the management, we report that
no fraud on or by the Company has been noticed or reported during the
year.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E
per Shyamsundar Pachisia
Partner
Mumbai, 13 July 2015 Membership Number: 49237
Mar 31, 2014
We have audited the accompanying financial statements of Petron
Engineering Construction Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2014, and the Statement of Profit and
Loss and Cash Flow Statement for the year then ended, and a Summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956, read with
General Circular 8/2014 dated 4 April 2014 issued by the Ministry of
Corporate Affairs. This responsibility includes the design,
implementation and maintenance of internal control 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 financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 disclosures in the 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 control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, 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.
Basis for Qualified Opinion
a) We report that in respect of a contract, as at March 31, 2014, trade
receivables (net of mobilization advance of Rs. 2,926 Lacs), unbilled
revenue and trade payables of Rs. 1,267 Lacs, Rs. 6,256 Lacs and Rs.
1,826 Lacs respectively, are subject to final confirmation as the said
contract is under negotiation. In the absence of such confirmations and
pending final outcome of the negotiations, we are unable to comment
upon the amounts ultimately receivable/payable in respect of this
contract and the consequential impact, if any, on the reported profit
for the year ended March 31, 2014 and corresponding assets and
liabilities as at that date. Our Audit Report on the financial
statements for the year ended March 31, 2013 was also modified in
respect of the above matter.
b) The Company has recognised revenue and receivables of Rs. 3,811 Lacs
on certain projects arising out of design changes and/or scope
variations for which acceptances by the clients are awaited. The amount
of such acceptances cannot therefore be measured reliably. In the
absence of sufficient appropriate audit evidence regarding the extent
to which such claims /scope variations will be accepted by the clients,
we are unable to comment on the appropriateness of such revenues as
recorded in the financial statements, the amounts that will be
ultimately realised and the consequential impact, if any, on the
reported profit for the year ended March 31,2014 and corresponding
assets and liabilities as at that date.
Qualified opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the
matters described in sub paras (a) and (b) of the Basis for Qualified
Opinion paragraph, the financial statements give the information
required by the Companies Act, 1956 ("the Act") in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
(a) We draw attention to Note X in the financial statements, which
describes the uncertainty related to the outcome of the winding up
petition filed against the Company by a vendor, more fully described
therein. Our opinion is not qualified in respect of this matter.
(b) We draw attention to Note XI in the financial statements, which
discusses liquidity issues being faced by the Company and management''s
plan and other mitigating factors to counter these issues. These
conditions, along with other matters as set forth in aforesaid note,
indicate the existence of a material uncertainty that may cast a doubt
about the Company''s ability to continue as a going concern. Our opinion
is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have 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 appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) Except for the matters described in sub paras (a) and (b) of the
Basis for Qualified Opinion paragraph, in our opinion, the Balance
Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
comply with the Accounting Standards notified under the Act, read with
General Circular 8/2014 dated 4 April 2014 issued by the Ministry of
Corporate Affairs;
(e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
Annexure referred to in paragraph 1 under the heading "Report on other
Legal and regulatory requirements" of our report of even date Re:
Petron Engineering Construction Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) ALL fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification 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 verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(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) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly, the provisions of clause
4(iii)(a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
(e) According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the register maintained under section 301 of
the Act. Accordingly, the provisions of clause 4(iii)(e) to (g) of the
Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations
given 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 for the sale of goods.
However, the internal control system for cost estimation process needs
to be strengthened in order to correct variances in costs estimated and
costs subsequently incurred, to make it commensurate with the size and
nature of the operations of the Company. In our opinion, this is a
major weakness in the internal control system.
(v) (a) In our opinion, there are no contracts or arrangements that
need to be entered in the register maintained under Section 301 of the
Act. Accordingly, the provisions of clause 4(v)(b) of the Order is not
applicable to the Company and hence not commented upon.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Act,
related to the manufacture of Machinery and Mechanical appliances and
parts thereof and execution of projects having application of
Mechanical Engineering, Fabrication, Construction and Refractory
products, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the same.
(ix) (a) Undisputed statutory dues including income-tax, wealth tax,
customs duty, excise duty, cess and other material statutory dues have
generally been regularly deposited with the appropriate authorities
though there have been slight delays in few cases of tax deducted at
source.
Undisputed statutory dues including provident fund, employees'' state
insurance, service tax and sales-tax have not been regularly deposited
with the appropriate authorities and there have been some delays in few
cases of sales tax and serious delays in large number of cases of
provident fund, employees'' state insurance and service tax. There are
no dues payable on account of Investor Education and Protection Fund.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''
state insurance, income tax, service tax, sales-tax, customs duty,
excise duty cess and other material statutory dues were outstanding, at
the year end, for a period of more than six months from the date they
became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, service tax, customs duty, excise duty and cess
on account of any dispute, are as follows:
Name of the Statute Nature of Dues Year Amount (Rs)
Finance Act, 1994 Service Tax (net of 2004-06 7,132,888
Rs. 2,377,625 paid)
Finance Act, 1994 Service Tax (net of 2005-09 42,759,239
Rs. 6,063,519 paid)
Finance Act, 1994 Service Tax 2008-09 184,672
Finance Act, 1994 Service Tax 2006-07 2,626,200
Central Excise Excise Duty (net of 2001-02 252,640
Act, 1944 Rs. 50,000 paid)
Central Excise Excise Duty (net of 2004-05 388,314
Act, 1944 Rs. 169,156 paid)
Central Excise Excise Duty 2009-11 157,946
Act, 1944
Central Sales Central Sales Tax 2006-07 807,261
Tax, 1956
Maharashtra Work Contract Tax 2003-04 323,573
Value Added
Tax Act, 2002
Bombay Sales Sales Tax (net of 2004-05 169,822
Tax Act,1959 Rs. 235,000 paid)
West Bengal VAT 2007-08 2,589,556
Value Added
Tax Act, 2003
Rajasthan Entry VAT (net of 2008-09 773,244
Tax -Goods Rs. 489,396 paid)
Act, 2003
West Bengal VAT 2009-10 18,178,990
Value Added
Tax Act, 2003
Central Sales Central Sales Tax 2009-10 1,514,805
Tax (West
Bengal) Rules,
1958
West Bengal VAT 2010-11 16,694,016
Value Added
Tax Act, 2003
Building and Other Labour Welfare Cess 2007-08 3,970,102
Construction
Workers''
Welfare Cess
Act, 1996
Income Tax Income Tax 2010-11 2,137,074
Act,1961
Income Tax Tax Deducted at 2006-11 952,344,432
Act, 1961
Source
Name of the Statute Forum where dispute is
pending
Finance Act, 1994 Commissioner of Customs, Central
Excise and Service Tax, Rohtak
Finance Act, 1994 CESTAT, Ahmedabad
Finance Act, 1994 Commissioner (Appeals) of Central
Excise, Haldia
Finance Act, 1994 Joint Commissioner of Customs,
Central Excise and Service Tax, Bhopal
Central Excise CESTAT, Navi Mumbai
Act, 1944
Central Excise CESTAT, Vadodara
Act, 1944
Central Excise Appellate Tribunal, Ahmedabad
Act, 1944
Central Sales Deputy Commissioner Sales Tax, West
Tax, 1956 Bengal
Maharashtra Joint Commissioner of Sales Tax
Value Added (Appeals)
Tax Act, 2002
Bombay Sales Joint Commissioner of Sales Tax
Tax Act,1959 (Appeals)
West Bengal Joint Commissioner of Commercial
Value Added Taxes
Tax Act, 2003
Rajasthan Entry Deputy Commissioner (Appeals) Sales
Tax -Goods Tax, Kota
Act, 2003
West Bengal Joint Commissioner of Sales Tax
Value Added
Tax Act, 2003
Central Sales Joint Commissioner of Sales Tax
Tax (West
Bengal) Rules,
1958
West Bengal Joint Commissioner of Sales Tax
Value Added
Tax Act, 2003
Building and Other Bihar Building and Other Construction
Construction Workers'' Welfare Board
Workers''
Welfare Cess
Act, 1996
Income Tax Commissioner of Income-tax
Act,1961 (Appeals), Mumbai
Income Tax Commissioner of Income-tax
Act, 1961 (Appeals), Mumbai
Source
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, the Company has delayed repayment
of dues to financial institutions and banks during the year and Rs.
2,870,685 of such dues were in arrears as on the balance sheet date.
Following are the details of such delays:
Particulars Delays 1- 60 days No. of instances
of delays
Term Loan (INR) 34,305,798 14
Interest Liability (INR) 42,130,105 25
The Company did not have any outstanding debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion, 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 to the
Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) According to the information and explanations given to us, the
Company has not raised any money through public issue during the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E
per Hemal Shah
Partner
Mumbai, May 29, 2014 Membership Number: 42650
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Petron
Engineering Construction Limited ("the Company"), which comprise the
Balance Sheet as at March 31,2013, and the Statement of Profit and Loss
and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control 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 financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 disclosures in the 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 control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, 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 auditopinion.
Basis for Qualified Opinion
We report that as at March 31,2013 Trade receivables of Rs. 1,278 Lacs
(net of mobilization advance of Rs. 2,926 Lacs), unbilled revenue,
being dues receivable from a customer amounting to X 6,256 Lacs and
trade payables of Rs. 1,866 Lacs relating to a contract, are subject to
final confirmation from the respective parties as the matter is under
negotiation. In the absence of such confirmations and pending final
outcome of the negotiations, we are unable to comment upon the amounts
ultimately receivable/payable in respect of this contract and the
consequential impact, if any, on the reported profit for the year ended
March 31,2013 and corresponding Assets and Liabilities as at that date.
Qualified opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the matter
described in the Basis for Qualified Opinion paragraph, 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:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2013;
b) in the case of the Statement of Prof it and Loss, of the profit/loss
for the yea r ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows forthe
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary forthe purpose of
ouraudit;
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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) Except for the matter described in the Basis for Qualified Opinion
paragraph, In our opinion, the Balance Sheet, Statement of Profit and
Loss, and Cash Flow Statement comply with the Accounting Standards
referred to in subsection (3C) of section 211 of the Companies Act,
1956;
e) On the basis of written representations received from the directors
as on March 31,2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
¦ Annexure referred to in paragraph 3 of our report of even date Re:
Petron Engineering Construction Limited (''the Company'')
(i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) All fixed assets have not been physically verified by the management
during the year but there is a regular programme of verification 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 verification.
c) There was no disposalof a substantial part of fixed assets during
the year.
(ii) a) The management has conducted physical verification of inventory
at reasonable intervals during the year.
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 onphysicalverification.
(iii) a) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, the provisions of clause
4(iii)(a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
b) The Company had taken loan from one company covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs. 84,488,118 and the year-end
balance of loan taken from such party was Rs. 14,247,601.
c) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
d) The loan taken is re-payable along with interest on demand. As
informed, the lenders have not demanded repayment of any such loan
during the year, thus, there has been no default on the part ofthe
company.
(iv) In our opinion and according to the information and explanations
given 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 for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
(v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
b) None of the transactions made in pursuance of such contracts or
arrangements exceed the value of Rupees five lakh in respect of any one
such party in the financialyear.
vi) The Company has not accepted any deposits from the public.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(l)(d) of the Companies
Act, 1956, related to the manufacture of Machinery and Mechanical
appliances and parts thereof z execution of projects having application
of Mechanical Engineering, Fabrication, Construction and Refractory
products, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of thesame.
ix) a) The company is generally regular in depositing with appropriate
authorities 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 materialstatutory dues applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income tax ,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding f inancialyear.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bankor debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and recordsproduced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in ortrading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
bankorfinancial institutions.
(xvi) Based on information and explanations given to us by the
management, term loans were applied forthe purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained undersection
301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during
theyear.
(xx) According to the information and explanations given to us, the
Company has not raised any money through public issue during theyear.
(xxi) Based upon the audit procedures performed forthe purpose of
reporting the true and fair view of thefinancialstatementsand as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
theyear.
For S.R. Batliboi and Co. LLP
Firm registration number: 301003E
Chartered Accountants
per Hemal Shah
Partner
Membership no.: 42650
Mumbai, May 29, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of Petron Engineering
Construction Limited ('the Company') as at March 31, 2012 and also the
Statement of profit and loss and the cash flows 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 a bout 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) 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 paragraph k and
5 of the said Order.
The balances of the Trade payables are in the process of
confirmation/reconciliation. Consequently we are unable to comment on
the carrying values of these balances as recorded in these financial
statements and accordingly the impact of the consequential adjustments,
if any, on the Profit and Assets/Liabilities cannot be ascertained.
5. Further to our comments in the Annexure referred to above, we report
that:
i. 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, except for our comments on paragraph 4 above relating to
information in respect of pending balances confirmation/reconciliation.
ii. 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;
iii. The balance sheet, Statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, Statement of profit and loss and
cash flows statement dealt with by this report comply with the
accounting standards referred to in sub-section [30 of section 211 of
the Companies Act, 1956, except for comments in paragraph 4 above;
v. On the basis of the written representations received from all the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the director are disqualified from
being appointed as a director in any other public company in terms of
clause (g) of sub-section (1) of section 274 of the Companies Act,
1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts except for the possible
effect of the matter in paragraph A, 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;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2012;
b) in the case of the statement of profit and loss, of the Profit
for the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
*ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE* Re:
Petron Engineering Construction Limited ('the Company')
i) At The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
c) There was no disposal of a substantial part of fixed assets during
the year.
ii) a) The management has conducted physical verification of inventory
at reasonable intervals during the year.
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) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, the provisions of clause
4(iii)(a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
b) According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Accordingly, the provisions of clause
4(iii)(e) to (g) of the Order are not applicable to the Company and
hence not commented upon.
iv) in our opinion and according to the information and explanations
given 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 for the sale of goods and
services. During the course of our audit we have not observed any major
weakness or continuing failure to correct any major weakness in the
internal control system of the company in respect of these areas.
v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
b) In respect of transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lacs entered into
during the financial year, because of the unique and specialized nature
of the items involved and absence of any comparable prices, we are
unable to comment whether the transactions were made at prevailing
market prices at the relevant time.
vi) The Company has not accepted any deposits from the public.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1 )ld) of the Companies
Act, 1956, related to the manufacture of Machinery and Mechanical
appliances and parts there of and execution of projects having
application of Mechanical Engineering, Fabrication, Construction and
Refractory products, and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained.
ix) a) The company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employee's state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employee's state insurance, income tax ,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the Nature of Dues Year
Statute
Bombay Sales tax act, Work Contract Tax 2003-04
1959
Bombay Sales tax act, Sales Tax 2004-05
1959
Central Sales Tax Central Sales Tax 2006-07
(West Bengal) Rules,
1958
Kolkata Sales Tax Act Sales Tax 2007-08
Uttar Pradesh Sales Sales Tax 2002-04
Tax Act
Central Sales Tax 2002-04
Entry Tax 2003-04
Central Excise Act Excise Duty 2001-02
Excise Duty 2004-05
Finance Act, 1994 Service Tax 2004-05
Service Tax 2008-09
Income Tax Act, Tax deducted at 2006-11
1961 source
The Building and Other Worker Welfare Cess 2007-08
Construction Workers
Welfare Cess Act, 1996
Worker Welfare Cess 2007-08
Maharashtra Value Added Value Added Tax 2005-08
Tax Act, 2002
Central Sales Tax Act, Central Sales Tax 2005-08
1956
Name of the Amount Forum where dispute
Statute is pending
Bombay Sales tax, act 323,573 Joint Commissioner of
1959 Sales Tax (Appeals)
Bombay Sales Tax 169,822 Joint Commissioner of
1959 Sales Tax (Appeals)
Central Sales Tax 807,261 Deputy Commissioner of
(West Bengal) Rules,1958 Sales Tax
Kolkata Sales Tax Act 2,589,556 Joint Commissioner of
Commercial Tax
Uttar Pradesh Sales 6,368,000 Assistant Commissioner
Tax Act of Sales Tax
20,000 Assistant Commissioner
of Sales Tax
20,500 Assistant Commissioner
of Sales Tax
Central Excise Act 640,954 CESTAT
Finance Act,1994 7,842,788 Commissioner, Central
Excise, Rohtak
622,703 Deputy Commissioner of
Central Excise & Service
Tax Division, Sitapur
Income Tax Act,1961 952,344,432 Commissioner of Income
Tax (Appeals)
The Building and other 3,970,102 Bihar Building & Other
Construction Workers
Welfare Board Construction Workers
Welfare Board
*24,073,648 High Court
(Madhya Pradesh)
Maharashtra Value Added 39,388,724 Deputy Commissioner
Tax Act,2002 (Large Tax Payer Unit)
Sales Tax
Central Sales Tax Act, 33,544,370 Deputy Commissioner
1956 (Large Tax Payer Unit)
Sales Tax
* Includes amount paid under Protest Rs. 22,421,066
x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund /society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
Bank or financial institutions.
xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
xviii) The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained undersection301
of the Companies Act, 1956.
xix) The Company did not have any outstanding debentures during
the year.
xx) According to the information and explanations given to us, the
Company has not raised any money through public issue during the year.
xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Co.
Firm Registration No.: 301003E
Chartered Accountants
per Hemal Shah
Partner
Membership no.: 42650
Mumbai, 18th May, 2012
Mar 31, 2011
We have audited the attached Balance Sheet of PETRON ENGINEERING
CONSTRUCTION LIMITED, as at 31st March 2011, the Profit and Loss
Account and also the Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audit.
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 misstatements. 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.
1. As required by the Companies (Auditors Report) Order, 2003 (as
amended) ("the order") 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 & 5 of the said order.
2. Further to our comments in the Annexure referred to in Paragraph 1
above, we report that:
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
audit;
b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
e) As per the information and explanations given to us and written
representations received from the directors of the Company, we report
that none of the Directors of the Company is disqualified as on 31st
March 2011 from being appointed as a director under clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
f) Without qualifying our report, we draw attention to note no. B20(c)
of schedule 21 regarding pending approval of the Central Government for
managerial remuneration paid in earlier years as stated in the said
note.
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with
accounting policies and note no. B8 of schedule 21 regarding inclusion
of service tax as part of the revenue as stated in the said note, and
read together with other notes to accounts, 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 the Company
as at 31st March, 2011;
ii) in the case of the Profit and Loss Account, of the profit 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.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 1 of our Report of even date of PETRON
ENGINEERING CONSTRUCTION LIMITED for the year ended 31st March 2011)
i) a) The Company has maintained proper records in respect of fixed
assets showing full particulars including quantitative details and
situation of fixed assets except in respect of certain fixed asset
acquired during the year where the same is in process of updation.
b) As explained to us, certain fixed assets have been physically
verified by the Management according to a phased programme 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 the nature
of its Fixed Assets. As explained, reconciliation of the book records
and the physical assets has been done and there is no material
discrepancy.
c) As per the records and information and explanations given to us,
Fixed Assets disposed off during the year were not substantial.
ii) a) As explained to us, inventories have been physically verified by
the Management at reasonable intervals.
b) In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) On the basis of our examination of the records of the Company, we
are of the opinion that the Company is maintaining proper records of
inventory (read with note no. B9 of schedule 21). The discrepancies
noticed on such physical verification of inventory as compared to book
records were not material.
iii) a) According to the information and explanation given to us, the
company has not granted any loans, secured or unsecured loan to
companies, firms or other parties as covered in the register maintained
u/s 301 of the Act. Accordingly, the clause 4 (iii) (b) to (d) of the
order are not applicable.
b) The Company has not taken secured or unsecured loans from companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Maximum outstanding balance during the
year was Rs. 2,120 Lacs and year end balance was Nil pertains to loans
taken in the previous year.
c) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions on
which aforesaid loan has been taken are not, prima facie, prejudicial
to the interest of the company.
d) The repayment of principal amounts and interest during the year is
as per stipulations.
iv) In our opinion and according to the information and explanations
given to us, certain items purchased/ sold/ services rendered are of
special nature for which, as explained, suitable alternative sources,
do not exist for obtaining comparative quotations, taking into
consideration the quality, usage and such other factors, there are
adequate internal control systems commensurate with the size of the
Company and nature of its business with regard to purchase of
inventory, fixed assets and for the sale of goods and services (read
with note no. B7(a) & B9 of schedule 21). Further, on the basis of
examinations of the books and records of the company, carried out in
accordance with the generally accepted auditing practices in India, and
according to the information and explanations given, we have neither
come across nor have been we informed of any instance of major
weaknesses in aforesaid internal control systems.
v) a) To the best of our knowledge and belief and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements that need to be entered in
the register maintained under section 301 of the Companies Act, 1956
have been so entered.
b) In our opinion and according to the information and explanations
given to us, read with our comment in para (iv) above, transactions
made in pursuance of contracts and arrangements entered into the
register maintained under section 301 of the Companies Act, 1956 and
exceeding the value of rupees five lacs in respect of each party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time where such market prices
are available.
vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of section 58A, 58AA and rules framed there under
and the directives issued by Reserve Bank of India and other relevant
provision of the Act. We have been informed that no order has been
passed by the Company Law Board or National Company law Tribunal or the
Reserve bank of India or any Court or any other Tribunal in this
regard.
vii) In our opinion, the Companys internal audit system is
commensurate with the size of the company and nature of its business.
viii) To the best of our knowledge and as explained to us, the Central
Government has not prescribed the maintenance of the cost records under
section 209(1)(d) of the Companies Act, 1956.
ix) a) in our opinion, and according to the information and
explanations given to us, the Company is generally regular in
depositing undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Income Tax,
Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess and other
material Statutory dues to the extent applicable with the appropriate
authorities. On the basis of audit procedures followed, test checks of
the transactions and the representations from the Management there are
no arrears of outstanding statutory dues as at the last day of the
financial year for a period of more than six months from the date they
became payable as at 31st March.
b) According to the records and information and explanations given to
us, there are no dues in respect of Custom Duty and Wealth Tax that
have not been deposited with the appropriate authorities on account of
any dispute and the dues in respect of Sales Tax, Service Tax, Excise
Duty, Income Tax & Cess that have not been deposited with the
appropriate authorities on account of dispute and the Forum where the
dispute is pending are given below:
Name of Statute Nature of Year Amount Forum where dispute
the dues (Rs.) is pending
Orissa Sales Sales Tax 2004-05 2,096,675 Deputy Commissioner
Tax Act of Sales Tax
(Appeals)
Tamilnadu General Sales Tax 2002-04 2,130,150 High Court (Chennai)
Bombay Sales Sales Tax 2003-04 493,395 Joint Commissioner
Tax Act of Sales Tax
(Appeals)
2006-07 100,000 Asst. Commissioner
of Sales Tax
Kolkata Sales Sales Tax 2006-08 3,396,817 Joint Commisioner
Tax Act of Commercial Tax
Uttar Pradesh Sales Tax 2002-04 3,757,602 Asst. Commissioner
Sales Tax of Sales Tax
Central Excise Excise 2001-02
Act Duty 640,954 CESTAT
2004-05
Finance Act, Service 2004-06 7,132,888 Commissioner,
Central
1994 Tax Excise, Rohtak
2008-09 622,703 Dy. Commissioner, of
Central Excise &
Service Tax Division,
Sitapur
Income Tax Act, Income 2006-09 765,840,340 Commissioner of
1961 Tax income Tax
(Appeals)
The Building and Worker 2007-08 3,970,102 Bihar Building &
Other Construct- Welfare Other Construction
ion Workers Cess Workers Welfare
Board
Welfare Cess 2007-08 23,475,514 High Court
Act, 1996 (Madhya Pradesh)
x) The Company does not have accumulated losses as at end of the
financial year and has not incurred cash losses during the financial
year and in the immediately preceding financial year.
xi) In our opinion, on the basis of audit procedure and on the basis of
information and explanation given to us, the Company has not defaulted
in repayment of dues to financial institutions or banks.
xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
xiii) The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund /
Society. Therefore, the provisions of clause 4 (xiii) of the Order is
not applicable to the Company.
xiv) According to the information and explanations given to us, the
Company is not dealing in or trading in shares, securities, debentures
and other investments. Therefore, the provisions of clause 4 (xiv) of
the Order is not applicable to the Company.
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xvi) In our opinion and on the basis of information and explanations
given to us, the term loans raised during the year by the Company were
applied for the purpose for which the loans were obtained where such
end use has been stipulated by the lender.
xvii) According to the information and explanations given to us and on
an overall examination of financial statements of the Company and after
placing reliance on the reasonable assumptions made by the Company for
classification of usages of funds, we are of the opinion that, prima
facie, as at the close of the year, short term funds have not been
utilized for long term purposes.
xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to any
parties or companies covered in the register maintained under Section
301 of the Act during the year.
xix) Based on the examination of the documents and records made
available and information and explanations given to us, the Company has
not issued any debentures during the year.
xx) The Company has not raised money through public issue during the
year.
xxi) Based on the audit procedures performed and on the basis of
information and explanations provided by the management, no material
fraud on or by the Company has been noticed or reported during the
course of our audit nor we have been informed about any such instance.
For LODHA & CO.,
Chartered Accountants
FRN-301051E
N.K. Lodha
Partner
Membership No. 85155
New Delhi, 17th May, 2011
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