Mar 31, 2015
We have audited the accompanying Financial Statements of PNC INFRATECH LIMITED ("the Company") which comprises the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and 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 of these financial statements that gives 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 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 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 misstatements, whether due to fraud or error.
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 disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of the material misstatement of the financial statements, whether due to error or fraud. In making those risk assessments, the auditor considers internal 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 controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and 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 financial statements.
In our opinion and to the best of our information and according to the explanations given to us, 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, 2015 and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
Without qualifying, we draw attention to note no. 47 of the financial statement stating that pursuant to schedule II of The Companies Act 2013 (The New Act), during the year ending March 31, 2015, company has charged the depreciation based on useful life stated in schedule II of the Companies Act 2013, and is on pro-rata basis for addition and deletions. In case of Plant & Machinery based on technical estimate (excluding Cranes & Earthmoving Equipments), the useful life is more than as prescribed in Schedule II. Due to this change, the depreciation for the current year is more by Rs.64.45 Lacs as compared to depreciation as per the Companies Act 1956 and the carrying value of Rs.164.66 Lacs assets whose life have already expired as per schedule II, have been adjusted from opening general reserve.
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 section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order;
2. As required by section 143(3)of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of written representations received from the directors as on 31 March 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015, from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the other matters 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 litigation on its financial position in its financial statements- Refer Note 34 to the financial statements;
ii) As explained to us, there is not any material foreseeable losses, on long term contracts, therefore the Company has not made any provision, required under the applicable law or accounting standards;
iii) As informed, there has been no amount required to be transfer, to the Investor Education and Protection Fund by the Company.
ANNEXURE TO THE AUDIT REPORT to the pnc infratech limited
Referred to in paragraph 1 of report on other legal and regulatory requirement's paragraph of our report on the financial statement of even date,
(1) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets are physically verified by the management in a phased manner 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. According to information and explanation given to us, the discrepancies noticed on physical verification were not material and have been properly dealt within the books of account.
(2) (a) According to the information & explanations given to us, the management has physically verified the inventory during the year to a reasonable extent except material in transit which has been subsequently verified. The Company is in process of covering all material items. Further we are explained that there are no items, either in control of management or lying with third party, for which physical verification was not done.
(b) In our opinion and according to the information & explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size and nature of the business of the Company.
(c) In our opinion and according to the information & explanations given to us, the Company is maintaining proper records of inventory. During the year, the physical verification was conducted at various sites and no material discrepancies have been found and for other discrepancies considered reasonable have been adjusted in books of account. The process of recording of physical verification needs to be further strengthened considering the nature and cycle of various projects.
(3) (a) As informed to us, the Company has granted unsecured interest free loans to its three subsidiaries & an associate and interest bearing loan to a subsidiary, covered in the register maintained under section 189 of the Companies Act, 2013, the balance outstanding is H7152 Lacs and H199.74 Lacs respectively.
(b) The tenure of agreement period of repayment are six month from the date of disbursement or receipt of grant/annuity , the receipt of principle amount as explained it will be recovered once the payment received by borrower from respective authority.
(c) In case of one subsidiary company there is overdue interest of H221.94 Lacs. As explained the company is pursuing for its recovery.
(4) According to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and with regard to sale of goods and rendering of construction related services. In case of certain specialized specified construction related material items purchased and service rendered, we are explained that they are of special nature and suitable alternative sources did not exist for obtaining comparable quotations during the course of our audit, and examination of the books and records of the Company and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.
(5) The Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.
(6) We have broadly reviewed the books of account relating to materials, Labour and other items of cost maintained by the Company as specified by the Central Government of India under section 148(1) of the Companies Act, 2013 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 records with a view to determine whether they are accurate and complete.
(7) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular and is in process of aligning with changing regulations, in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales Tax/VAT/Work Contract Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues, as applicable, with the appropriate authorities except out of total wealth tax payable of H13.39 Lacs at the balance sheet date, out of which outstanding for more than six months is H9.89 Lacs at the balance sheet date.
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value added tax and Cess as at March 31, 2015 which have not been deposited on account of disputes, are as follows- Demand Amount Amount Deposited
Name Of Nature of Period to Forum where Statute Dues which Amt. Dispute is relates pending
2007-08, Appellate MP Entry Tax Entry 2008-09, Tribunal & Act, 1976 Tax 2009-10, challenge the 2010-11, constitution 2011-12 validity with Hon'ble Supreme Court of India
UP Entry Tax Entry 2004-05 to Hon'ble Supreme Act, 2007 Tax 2013-14 Court of India
UP Entry Tax Entry September Hon'ble Supreme Act, 2007 Tax 2014 to Court of India December 2014
Rajasthan Entry 2009-10 to Assessing Entry Tax 2014-15 Officer, Tax Act, Commercial 2003 Tax Deptt., Rajasthan
2007-08 Assessing Officer, Commercial Tax Deptt., Agra
Assessing Officer, Commercial Tax Deptt., Agra
UP Trade Sale Tax 2006-2007 Assessing Tax, 1948 Officer, Commercial Tax Deptt., Agra 2010-2011 2013-2014 Additional (Upto Dec-13) Commisioner Grade II (Appeal Commercial Tax Agra)
2006-07 TO Appellate 2008-09 Tribunal
2014 to 2015 Additional 2007- 08 Commissioner (1.4.2007- Hon'ble UP VAT VAT 31.12.2007) Allahabad High ACT, 2008 Court
2010-11 Appellate Tribunal
2008-09 Hon'ble to 2012-13 Allahabad High Court
2011-12 Appellate Tribunal
2008-09 First appellate
2005-06 to First 2006-07 appellate
Uttarakhand VAT 2007-2008 Joint VAT Act, Commissioner 2005 Appeal
VAT 2010-2011 Joint Commissioner Appeal
2013-2014, SLP Filed in 2014-2015 High Court
2009-2010 Joint Commissioner Appeals
2010-11 First appellate
MP VAT VAT 2011-12 First Act, 2002 appellate
2009-10 First appellate
Central Service 2005-06 CESTAT, Excise Tax 2003 to 2006 New Delhi & Service CESTAT, Tax Act, Ludhiana 1994
Income Tax Income 2005-06 Commissioner Act, 1961 Tax to 2011-12 (Appeal)of IT, Agra
Labour Labour 2010 Hon'ble MP Welfare Cess High Court Act, 1953
Name Of Nature Demand Amount Statute Dues Amount Deposited (H in Lacs) (H in Lacs)
MP Entry Tax Entry 183.98 46.33 Act, 1976 Tax
UP Entry Tax Entry 480.89 68.00* Act, 2007 Tax
UP Entry Tax Entry 248.29** 0 Act, 2007 Tax
Rajasthan Entry Entry Tax 105.59** 33.01 Tax Act, 2003 12.87 0
UP Trade Sale Tax 189.36 - Tax, 1948
125.52 13.19 4.15 -
UP VAT VAT ACT, 2008 1.40 1.40
Uttarakhand VAT 20.07 - VAT Act, 14.45 - 2005 174.82 -
VAT 2.49 -
MP VAT VAT 6.63 - Act, 2002 16.61 4.50
Central Service 157.21 - Excise Tax & Service Tax Act, 1994 *
Income Tax Income 1125.93 - Act, 1961 Tax
Labour Labour 268.85 2.69 Welfare Cess Act, 1953
Total 4996.43 169.52
* Includes Bank Guarantee of H34 lacs ** Amount on estimated basis
(c) As informed there has been no amount required to be transfer, to the Investor Education and Protection Fund by the Company.
(8) The Company does not have accumulated losses as at 31st March, 2015. The Company has not incurred cash losses during the current financial year covered by our audit and in the immediately preceding financial year.
(9) According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of its dues to Banks or Financial Institution.
(10) In our opinion, and according to the information and explanations given to us, and based on written representation from the Company, the Company has given corporate guarantee for loans taken by one of its associates (refer note 34) and terms and conditions of such corporate guarantee is not prima facie prejudicial to the interest of the company. The Company has also given general business undertakings for shortfall of funds availed for facilities in subsidiaries and associates for BOT (build, operate and transfer) projects.
(11) In our opinion, and according to the information and explanations given to us, the term loans availed by the Company were prima facie applied by the Company during the year for the purpose for which the loan was obtained
(12) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the year, nor have we been informed of such case by the management.
For S.S.Kothari Mehta & Co. For Purushottam Agrawal & Co.
Chartered Accountants Chartered Accountants Firm Reg. No. 000756N Firm Reg. No. : 000731C
(Neeraj Bansal) (Sanjay Agarwal) Partner Partner Membership No. 95960 Membership No. 72696
Place: Agra Date: June 25, 2015