Auditor Report of Patel Engineering Ltd.
Mar 31, 2023
Independent Auditors'' Report
To The Members of Patel Engineering Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying Standalone Financial
Statements of Patel Engineering Limited ("the Company") and
its joint operations, which comprise the Balance Sheet as at
31st March 2023, the Statement of Profit and Loss (including
the of Other Comprehensive Income), the Statement of Changes
in Equity and the Statement of Cash Flows for the year then
ended, and Notes to Standalone Financial statements, including ;
summary of significant accounting policies and other explanatory
information, these also include financials of the Real Estate
Division Branch of the company for the year ended on that date
audited by the branch auditor of the company''s branch located
in Mumbai (hereinafter referred to as "Standalone Financial
Statements")
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid Standalone
Financial statements give the information required by the
Companies Act, 2013, as amended ("the Act") in the manner so
required and give a true and fair view in conformity with the
Indian Accounting Standards prescribed under section 133 of
the Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended, ("Ind AS") and other accounting
principles generally accepted in India, of the state of affairs of
the Company as at 31st March, 2023, and its profit including
other comprehensive income, changes in equity and its cash
flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statement in
accordance with the Standards on Auditing (SAs) specified under
section 143(10) of the Act. Our responsibilities under those
Standards are further described in the Auditor''s Responsibilities
for the Audit of the Financial Statements section of our report.
We are independent of the Company in accordance with the
Code of Ethics issued by the Institute of Chartered Accountants
of India (ICAI) together with the ethical requirements that are
relevant to our audit of the Standalone Financial statements
under the provisions of the Act and the Rules thereunder, and
we have fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics. We believe that
the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion on the Standalone
Financial Statements.
The independent Branch Auditors of Patel Engineering Limited
(Real Estate Division) ("the Division"), have without qualifying
their audit report dated 15th May, 2023 on the Standalone
Ind AS financial statement of the Division for the year ended
March 31, 2023 have drawn attention to the Note regarding
Company''s investment and given loans and advances to
Waterfront Developers Limited, a wholly owned subsidiary, where
notice dated 4th June 2015 was received from Government of
Mauritius for the termination of lease agreement entered on
11th December, 2009 with Les Salines Development Limited (a
Step-down subsidiary of Waterfront). In this case the process of
arbitration with the Government of Mauritius has been completed
during the year and management of the branch is expecting the
favorable order for the same.
Our opinion is not modified in respect of this matter.
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
Standalone Financial Statements for the financial year ended
31st March, 2023. These matters were addressed in the context
of our audit of the Standalone Financial Statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in
that context.
We have determined the matters described below to be the key
audit matters to be communicated in our report. We have fulfilled
the responsibilities described in the Auditors'' responsibilities
for the audit of the Standalone Financial Statements section of
our report, including in relation to these matters. Accordingly,
our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement
of the Standalone Financial Statements. The results of our audit
procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the
accompanying Standalone Financial Statements.
Information Other than the Standalone Financial
Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other
information. The other information comprises the information
included in the Annual Report, but does not include the
Standalone Financial Statements and our auditor''s report
thereon. The other information is expected to be made available
to us after the date of the Auditor''s Report.
Our opinion on the Standalone Financial Statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the Standalone Financial
Statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the Standalone Financial statements
or our knowledge obtained during the course of our audit or
otherwise appears to be materially misstated.
Responsibility of Management for the Standalone
Financial Statements
The Company''s Management and Board of Directors is responsible
for the matters stated in section 134(5) of the Act with respect
to the preparation of these Standalone Financial Statements
that give a true and fair view of the financial position,
financial performance, changes in equity and cash flows of the
Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards
specified under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended. This
responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for
safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgment
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 statement
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the
Management is responsible for assessing the Company''s ability tc
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the
Company or to cease operations, or has no realistic alternative
but to do so. The Board of Directors are also responsible for
overseeing the Company''s Financial reporting process.
Auditor''s Responsibilities for the Audit of the
Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether
the Standalone Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor''s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these Standalone Financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of
the Ind AS Financial statements, whether due to fraud or
error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the company has adequate internal
financial controls with reference to financial statements in
place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by Management.
⢠Conclude on the appropriateness of the management''s use
of the going concern basis of accounting in preparation of
Standalone Financial statements and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant
doubt on the Company''s ability to continue as a going
concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor''s report to
the related disclosures in the Ind AS Financial Statements
or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor''s report. However,
future events or conditions may cause the Company to
cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures, and
whether the financial statements represent the underlying
transactions and events in a manner that achieves fair
presentation.
Materiality is the magnitude of misstatements in the Ind
AS Financial Statements that, individually or in aggregate,
makes it probable that the economic decisions of a reasonably
knowledgeable user of the Standalone Financial statements
may be influenced. We consider quantitative materiality and
qualitative factors in (i) planning the scope of our audit work
and in evaluating the results of our work; and (ii) to evaluate
the effect of any identified misstatements in the Standalone
Financial statements.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
for the financial year ended March 31, 2023 and are therefore
the key audit matters. We describe these matters in our auditor''s
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our
report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits
of such communication.
1. We did not audit the financial statements and other
financial information in respect of:
i. The division whose financial statements reflect total
assets of '' 4,507.85 Million as at March 31, 2023,
total revenue of '' 191.62 Million, total profit/
(loss) after tax of '' (530.45) Million and total
comprehensive income of '' (530.45) Million for the
year ended March 31, 2023
ii. 20 unincorporated joint operations, whose financial
results reflect total assets of '' 2,797.73 Million as
at March 31, 2023, Company''s Share in total revenue
of '' 7,425.38 Million, total profit/(loss) after tax of
'' 114.29 Million and total comprehensive income of
'' 114.29 Million for the year ended March 31, 2023.
These Ind AS financial statement of the entities mentioned
in (i) and (ii) and other financial information have been
audited by other auditors, which financial statements,
other financial information and auditors'' reports have been
furnished to us by the management. Our opinion on the
Standalone Financial Statements, in so far as it relates to
the amounts and disclosures included in respect of these
branch and joint operations, and our report in terms of sub¬
section (3) and (11) of Section 143 of the Act including
report on other information, in so far as it relates to the
aforesaid branch and joint operations, is based solely on
the report(s) of such other auditors.
2. The accompanying Standalone Financial Statements include
unaudited financial statements and other unaudited
financial information in respect of:
i. 11 unincorporated joint operations whose financial
results reflect total assets of '' 617.39 Million as at
March 31, 2023, Company''s Share in total revenue
is '' 1,668.87 Million, total Profit/(loss) after tax of
'' (2.06) Millions and total comprehensive income of
'' (2.06) Millions for the year ended March 31, 2023.
These unaudited financial statements and other unaudited
financial information have been furnished to us by
the management. Our opinion, in so far as it relates
amounts and disclosures included in respect of this joint
operation, and our report in terms of sub-section (3) and
(11) of Section 143 of the Act including report on other
information in so far as it relates to the aforesaid joint
operations, is based solely on such unaudited financial
statements and other unaudited financial information.
In our opinion and according to the information and
explanations given to us by the Management, these
financial statements and other financial information are not
material to the Company.
Our opinion above on the Standalone Financial Statements,
and our report on other legal and regulatory requirements
below, is not modified in respect of the above matters with
respect to our reliance on the work done and the reports of
the other auditors and the financial statements and other
financial information certified by the Management.
3. The comparative financial information of the Company for
the year ended 31st March, 2022, prepared in accordance
with Ind AS, included in this Statement have been taken
from the merged financial statements certified by us dated
29th October 2022, correctly giving effect as per NCLT
Mumbai divisional bench order dated 16th June 2022 and
NCLT Hyderabad divisional bench dated 22nd July 2022.
The comparative financial information in these Financial
Statements will not match with the previous year published
financial statements which were audited by the other
auditor who have by their audit report dated 23rd May,
2022 have expressed an unmodified opinion on the previous
year financial statements.
Our opinion on the Standalone Financial Statements is not
modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2020
("the Order") issued by the Central Government in terms
of sub-section (11) of Section 143 of the Act, we give in
the "Annexure A" of this report a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
2. As required by Section 143(3) of the Act, we further report,
to the extent applicable that
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit of
the aforesaid Standalone Financial Statements;
b) 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
including Other Comprehensive Income, the Statement
of Changes in Equity and the statement of Cash Flow
dealt with by this Report are in agreement with the
relevant books of account;
d) In our opinion, the aforesaid Standalone Financial
Statements comply with the IND AS specified under
Section 133 of the Act;
e) On the basis of the written representations received
from the directors as on 31st March, 2023 taken on
record by the Board of Directors, none of the directors
is disqualified as on 31st March, 2023 from being
appointed as a director in terms of Section 164 (2) of
the Act.
f) With respect to the adequacy of the Internal Financial
controls Over Financial reporting of the Company
with reference to these Financial Statements and the
operating effectiveness of such controls, refer to our
separate Report in "Annexure B" to this report;
g) With respect to the other matters to be included
in the Auditor''s Report in accordance with the
requirement section 197(16) of the Act, as amended:
In our opinion and to the best of our information
and according to the explanations given to us, the
remunerations paid by the Company to its directors during
the year is in accordance with the provisions of section 197
of the Act.
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,
as amended, 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 as at 31st March, 2023
on its financial position in its Standalone
Financial statements to the extent determinable/
ascertainable. - Refer Note 47 to the Standalone
Financial Statements.
ii. The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There were no amounts which were required to
be transferred to the Investor Education and
Protection Fund by the Company.
iv. (a) The management has represented that,
to the best of its knowledge and belief,
no funds have been advanced or loaned
or invested (either from borrowed funds
or share premium or any other sources or
kinds of funds) by the Company to or in
any other persons or entities, including
foreign entities ("Intermediaries"), with
the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, whether , directly or indirectly lend
or invest in other persons or entities
identified in any manner whatsoever by
or on behalf of the Company or ("Ultimate
Beneficiaries") or provide any guarantee,
security or the like to or on behalf of the
ultimate Beneficiaries.
(b) The management has represented, that, to
the best of its knowledge and belief, no
funds have been received by the Company
from any persons or entities, including
foreign entities ("Funding Parties"), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall. Whether, directly or indirectly, lend
or invest in other persons or entities
identified in any manner whatsoever by or
on behalf of the Funding party ("ultimate
Beneficiaries") or provide any guarantee,
security or the like on behalf of the
Ultimate Beneficiaries.
(c) Based on such audit procedures as
considered reasonable and appropriate in
the circumstances, nothing has come to
our notice that has caused us to believe
that the representations under sub-clause
iv(a) and iv (b) contain any material mis¬
statement.
v. During the year no dividend is declared or paid
by the company.
i) Proviso to Rule 3(1) of the Companies (Accounts)
Rules, 2014 for maintaining books of account
using accounting software which has a feature of
recording audit trail (edit log) facility is applicable
to the Company with effect from April 1, 2023, and
accordingly, reporting under Rule 11(g) of Companies
(Audit and Auditors) Rules, 2014 is not applicable for
the financial year ended 31st March 31, 2023.
For Vatsaraj& Co.
Chartered Accountants
FRN: 111327W
Dr CA B.K. Vatsaraj
Partner
M. No.:039894
UDIN: 23039894BGZCSN3040
Mumbai, 15th May, 2023
Mar 31, 2018
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying Standalone Ind AS financial statements of Patel Engineering Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including other comprehensive Income), the Cash Flow Statement, the Statement of Change in Equity for the year then ended, and a summary of the significant accounting policies, other explanatory information. These also includes financials of the Real Estate Division Branch of the company and Joint operations (hereinafter referred to as âthe Standalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone Ind AS financial statements to give a true and fair view of the state of affairs (financial position), Profit and Loss (financial performance including other comprehensive income), cash flows and change in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards(Ind AS) specified under Section 133 of the Act read with relevant rules issued there under.
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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS 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 of the Standalone Ind AS financial statements 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 Standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Standalone Ind AS 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 Companyâs Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.
Opinion:
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS, of the state of affairs of the Company as at March 31, 2018, and its Profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We invite attention to:
a) As per Section 71 of Companies Act, 2013 the Company has created adequate Debenture Redemption Reserve for the Secured Redeemable Non-Convertible Debenture issued by the Company. However, in terms of Section 71 read with Rule 18(7)(C) of Companies Share Capital and Debentures Rules, 2014, the Company has not made the required deposit/investment to secure the repayment of debentures. Our opinion is not qualified in respect of this matter.
b) The independent Branch Auditors of, Patel Engineering Ltd (Real Estate Division), have without qualifying their audit report on the Standalone Ind AS financial statement for the year ended 31st March 2018 have drawn attention with respect to:
i. Note No. 27(a) (i) regarding Bellona Developers Limited which ceased to be a subsidiary of the company from 30th March 2016 after invoking of Strategic Debt Restructuring (SDR). Previous, year, the management has decided to write off its investments along with outstanding loans after adjusting any dues against the same. Hence, the Company has written off Rs. 2.63 million (P.Y. Rs. 398.50 million) as irrecoverable dues.
ii. Note No. 44 regarding Companyâs investment and loans and advances in Waterfront Developers Limited, where notice dated 04th June, 2015 was received from Government of Mauritius for the termination of Lease Agreement entered on 11th December, 2009 with Les Salines Development Limited (a step down subsidiary of Waterfront). In this case the process of Arbitration has been initiated with the Government of Mauritius.
Our report is not modified with respect to above matter.
Other Matters
a) The Ind AS financial statements of the Company for the year ended March 31, 2017, included in these standalone Ind AS financial statements, have been audited by the predecessor auditor who expressed a qualified opinion on those statement on July 24, 2017. Our opinion is not modified in respect of this matter.
b) The standalone financial results include the financial results of 8 unincorporated joint operations which have not been audited by their auditors, whose financial results reflect the Net Total Assets of Rs. 899.98 million as at 31st March 2018, Companyâs Share in Total revenue after elimination is Rs.1,570.30 million, Total Profit (net) after tax of Rs. 225.21 million and total comprehensive income (net) of Nil for the year ended on that date, as considered in these standalone financial results. The separate set of financials of these joint operations for the year ended March 31, 2018 are prepared by the management in accordance with accounting principle generally accepted in India, including Ind AS. Our opinion in so far it relates to the amounts and disclosure in respect of these joint operations is solely based on the report of the management certified accounts. Our opinion is not qualified in respect of this matter.
c) The standalone financial results also include the financial results of 4 unincorporated joint operations which have been audited by other auditors, whose financial results reflect the Net Total Assets of Rs. (2.91) million as at 31st March 2018, Companyâs Share in Total revenue after elimination is Rs. 29.66 million, Total loss (net) after tax of Rs. (1.40) million and total comprehensive income (net) of Nil for the year ended on that date, as considered in these standalone financial results. The separate set of financials of these joint operations for the year ended March 31, 2018 are in accordance with accounting principles generally accepted in India, including Indian Accounting Standards (Ind AS) and which have been audited for the year by the other auditors under generally accepted auditing standards applicable in India.
Our opinion in so far it relates to the amounts and disclosure in respect of these joint operations is solely based on the report of the other auditors. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1) As required by âthe Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), 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, we give in the Annexure A, 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 purposes of our audit;
b) 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) on the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ to this report;
g) with respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. the Company has disclosed the impact of pending litigations as at March 31, 2018 on its financial position in its Standalone Ind AS financial statements to the extent determinable/ascertainable. - Refer Note 45 to the Standalone Ind AS financial statements;
ii. the Company has made provision as at March, 31,2018 as required under the applicable law or accounting standard, for material foreseeable losses, if any, on long term contract.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
ANNEXURE A TO INDEPENDENT AUDITORSâ REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENT OF PATEL ENGINEERING LIMITED
Referred to in paragraph 1 under âReport on Other Legal and Regulatory requirementâ section of our report of even date.
i (a) The Company has maintained proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) During the year, fixed assets have been physically verified by the management at regular intervals and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us by the management, the title deeds of immovable properties included in property, plant and equipments / investment properties are held in the name of the Company, except for Freehold lands with gross block and net block of Rs. 7.13 millions.
ii. As explained to us, the Inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
iii. According to information and explanation given to us, the Companyâs has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnership firm or other parties, covered in the register maintained under section 189 of the Companies Act 2013. Accordingly Paragraph 3 (iii)(a), 3 (iii)(b) and 3(iii)(c) of the Order are not applicable to the Company.
iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013, to the extent applicable, in respect of the loans, investments, guarantees and security.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly Paragraph 3(v) of the Order is not applicable to the Company.
vi. We have broadly reviewed the books of accounts maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub section (1) of section 148 of the Companies Act in respect to companyâs products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records.
vii(a) According to the information and explanations given to us and for the records of the Company examined by us, undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income Tax, Sales tax, Service Tax, duty of Custom, duty of excise, Value Added Tax, Cess, goods and service tax (GST) and other statutory dues, as applicable, have been generally regularly deposited with the appropriate authorities except for the Sales Tax, Entry Tax, Service Tax and Municipality Tax amounting to Rs 373.03 million outstanding as at 31st March 2018 for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, the disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:
|
Particulars |
Financial Year to which amount relates |
Amounts in Million (Rs.) |
Forum where dispute is pending |
|
The Sales Tax Act |
2001-2002 to 2003-2004 |
14.99 |
Appellate Tribunal |
|
2005-2006, 2006-2007 and 2012-2013 |
19.16 |
Appellate Tribunal, Kolkata |
|
|
2007-2008 to 2011-12 |
41.92 |
W.B.C.T. Appellate and Revisional Board, Kolkata |
|
|
2007-2008 |
10.69 |
Deputy Commissioner Appellate -III, Mumbai |
|
|
Entry Tax |
2015-2016 |
6.95 |
Joint Commissioner of Commercial Tax (Appeals)-Central division Patna |
|
The Finance Act, 1994 |
2007-2008 to 2012-2013 |
323.20 |
|
|
April 2003 to July 2006 |
2.54 |
||
|
October 2009 to September 2010 |
108.31 |
Custom, Excise and Service Tax |
|
|
June 2007 to September 2009 |
651.88 |
Appellate Tribunal (CESTAT) |
|
|
April 2010-March 2013 |
623.22 |
||
|
April 2013 to March 2015 |
17.96 |
|
The Income Tax |
2003-04 to 2006-07 |
220.33 |
Honâble High Court |
|
|
Act,1961 |
2011-12 |
169.99 |
Commissioner of Income Tax (Appeals) |
|
|
2013-14 |
154.28 |
Income Tax Appellate Tribunal |
||
|
2014-15 |
263.15 |
Commissioner of Income Tax (Appeals) |
||
|
2015-16 |
114.73 |
Commissioner of Income Tax (Appeals) |
||
|
Provident fund |
2008-09, 2009-10 & 2010-11 |
7.14 |
Honâble High Court |
|
|
Custom Duty |
2011-2012 |
9.16 |
CESTAT, Chennai |
|
|
With respect to Independent Branch Patel Engineering Ltd (Real Estate Division) |
||||
|
The Finance Act, 1994 |
November 2009 to June 2012 |
404.69 |
Custom , Excise and Service Tax Appellate Tribunal |
|
|
July 2012 to March 2014 |
41.49 |
|||
|
April 2014 to March 2015 |
14.05 |
|||
|
April 2015 to June 2017 |
54.14 |
Commissioner of Service Tax |
||
|
Income Tax Act, 1961 |
2008-2009 to 2010-2011 |
Amount not quantified |
||
|
2011-2012 |
1.22 |
Income Tax Appellate Tribunal |
||
|
2012-2013 |
4.88 |
|||
|
2013-2014 |
120.06 |
Commissioner of Income Tax |
||
|
2014-2015 |
69.45 |
(Appeals) |
||
viii There are no loans or borrowings payable to government. The Company has defaulted in repayment of following dues to the financial institution, banks and debenture holders during the year. However, these balances were paid before the balance sheet date.
|
Debenture Holders |
Amounts in million (Rs. ) |
||
|
Particular |
Days |
Principal |
Interest |
|
Axis Bank Limited - Non-Convertible |
>90 |
500 |
90.24 |
|
Corporation Bank - Non-Convertible |
31-60 |
- |
3.31 |
|
61-90 |
150 |
49.67 |
|
|
>90 |
- |
7.1 |
|
|
UCO Bank - Non-Convertible |
61-90 |
150 |
18.71 |
|
Syndicate Bank - Non-Convertible |
61-90 |
100 |
- |
|
>90 |
- |
15.24 |
|
|
IDBI Bank Limited - Non-Convertible |
61-90 |
150 |
38.1 |
|
>90 |
- |
10.58 |
|
|
GIC - Non-Convertible |
31-60 |
- |
2.71 |
|
>90 |
- |
5.39 |
|
Banks |
Amounts in million (Rs.) |
|||
|
Particular |
Days |
Principal |
Letter of Credit/Bank |
Interest |
|
Guarantees |
||||
|
Standard Chartered Bank |
01-30 |
- |
- |
42.72 |
|
31-60 |
- |
- |
3.95 |
|
|
61-90 |
- |
- |
240.65 |
|
|
>90 |
93.04 |
- |
21.03 |
|
|
DBS Bank Limited |
01-30 |
- |
- |
63.2 |
|
31-60 |
- |
- |
51.98 |
|
|
61-90 |
2.25 |
- |
144.91 |
|
|
>90 |
- |
- |
32.92 |
|
|
Indusind Bank Limited |
01-30 |
- |
- |
12.99 |
|
31-60 |
29.88 |
- |
0.48 |
|
|
61-90 |
29.88 |
- |
6.91 |
|
|
>90 |
- |
- |
28.88 |
|
|
Corporation Bank |
01-30 |
- |
- |
59.62 |
|
61-90 |
627.37 |
- |
48.59 |
|
|
>90 |
- |
- |
17.46 |
|
|
Axis Bank Limited |
01-30 |
- |
63.58 |
81.62 |
|
61-90 |
417 |
231.11 |
315.97 |
|
|
>90 |
- |
- |
21.46 |
|
|
HDFC Bank Limited |
61-90 |
16 |
- |
0.22 |
|
>90 |
74.24 |
- |
7.41 |
|
|
Canara Bank |
01-30 |
- |
- |
18.33 |
|
31-60 |
- |
- |
17.4 |
|
|
61-90 |
- |
- |
54.69 |
|
|
Bank of Baroda |
01-30 |
- |
98.51 |
43.49 |
|
31-60 |
- |
- |
4.7 |
|
|
61-90 |
35.63 |
- |
709.88 |
|
|
Bank of India |
01-30 |
- |
- |
56.84 |
|
31-60 |
- |
60 |
17.16 |
|
|
61-90 |
71.25 |
- |
990.77 |
|
|
IDBI Bank Limited |
01-30 |
- |
45.73 |
78.36 |
|
31-60 |
- |
- |
44.47 |
|
|
61-90 |
- |
- |
591.3 |
|
|
Bank of Maharashtra |
01-30 |
- |
- |
77.33 |
|
31-60 |
- |
- |
21.51 |
|
|
61-90 |
154.35 |
- |
299.16 |
|
|
Ratnakar Bank Limited |
01-30 |
- |
- |
8.08 |
|
31-60 |
- |
- |
1.11 |
|
|
61-90 |
- |
- |
4.95 |
|
|
>90 |
- |
- |
48.62 |
|
|
Dena Bank |
01-30 |
- |
126.34 |
129.19 |
|
31-60 |
250 |
50.14 |
39.1 |
|
|
61-90 |
37.5 |
- |
354.04 |
|
|
>90 |
1,500.00 |
- |
251.93 |
|
|
State Bank of India |
01-30 |
- |
- |
2.69 |
|
31-60 |
- |
- |
2.11 |
|
|
61-90 |
10.34 |
- |
17.85 |
|
|
>90 |
- |
- |
8.14 |
|
|
ICICI Bank Limited |
01-30 |
- |
- |
74.95 |
|
31-60 |
- |
- |
11.28 |
|
|
61-90 |
93.6 |
902.91 |
205.25 |
|
|
Society General Bank |
01-30 |
19.16 |
- |
20.63 |
|
31-60 |
- |
- |
4.3 |
|
|
61-90 |
- |
- |
82.22 |
|
|
>90 |
- |
- |
1.32 |
|
|
Exim Bank |
01-30 |
91.4 |
- |
26.23 |
|
31-60 |
225 |
- |
3.35 |
|
|
61-90 |
751.63 |
- |
35.28 |
Equipment Finance Company
Amounts in million (Rs. )
|
Particular |
Days |
Principal |
Interest |
|
Srei Equipment Finance Ltd. |
01-30 |
3.59 |
1.84 |
|
31-60 |
1.42 |
0.82 |
|
|
61-90 |
0.71 |
0.41 |
The Company has defaulted in repayment of following dues to the debenture holders during the year, which were not paid as at the balance sheet date:
Debenture Holders
Amounts in million (Rs. )
|
Particular |
Days |
Principal |
Interest |
|
LIC- Non-Convertible |
1-30 |
- |
8.56 |
|
>90 |
- |
30.92 |
|
|
GIC- Non-Convertible |
61-90 |
- |
0.27 |
|
>90 |
100.00 |
0.63 |
ix According to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments).
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Financial Statements and according to the information and explanations provided by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
xi. According to the information and explanations given to us, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. In our opinion and according the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
xiii. According to the information and explanation given to us and based on our verification of the records of the Company and on the basis of review and approval by the Board and Audit Committee, the transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in the Standalone Ind AS financial statements as required by the applicable accounting standards.
xiv. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debenture except for allotment of optionally convertible debentures during the year to lenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) adopted by the Joint Lenderâs Forum as stated in notes 27(d) to the standalone financial statements. In respect of the same, in our opinion, the Company has complied with the requirements of section 42 of the Act and Rules framed there under.
xv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with them during the year. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
ANNEXURE B TO INDEPENDENT AUDITORSâ REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENT OF PATEL ENGINEERING LIMITED
Referred to in paragraph 2(f) under âReport on Other Legal and Regulatory requirementâ section of our report of even date
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013.
1. We have audited the internal financial controls over financial reporting of Patel Engineering Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that
i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the Standalone Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matter
9. We did not audit the internal financial controls over financial reporting of the Independent Branch âPatel Engineering Limited (Real Estate Division). The internal financial control over financial reporting of this Branch has been audited by their independent auditor whose report has been furnished to us, and our opinion in so far as it relates to the internal financial control over financial reporting included in respect to Branch, is based solely on the report of their auditor.
Our opinion is not modified in respect of this matter.
For T. P. Ostwal & Associates LLP
Chartered Accountants
(Registration No. 124444W/W100150)
T. P. Ostwal
Partner
Membership Number: 30848
Mumbai,
May 28, 2018
Mar 31, 2017
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying Standalone Ind AS financial statements of Patel Engineering Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Change in Equity for the year ended, and a summary of the significant accounting policies and other explanatory information, and which includes merged entity Patel Realty (India) Ltd and Joint operations (hereinafter referred to as âthe Standalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), Profit and Loss(financial performance including other comprehensive income),cash flows and change in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards(Ind AS) specified under Section 133 of the Act.
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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS 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 of the Standalone Ind AS financial statements 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 Standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditorsâ judgement, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Standalone Ind AS 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 Companyâs Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.
Basis of Qualified Opinion:
The independent Auditors of, Patel Realty (India) Ltd (âPRILâ), the erstwhile subsidiary company, have qualified in their audit report on the standalone Ind AS financial statement for the year ended 31st March 2017 with respect to:
The company is in process of being compliant with provisions of Section 203 of the Companies Act, 2013 which pertains to appointment of Key Managerial Person. (PRIL)
Qualified Opinion:
In our opinion and to the best of our information and according to the explanations given to us, except for matter described in paragraph âBasis of qualified Opinionâ, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2017, and its Profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We invite attention to:
a) The independent Auditors of, Patel Realty (India) Ltd. (âPRILâ), an erstwhile Subsidiary company, have without qualifying their audit report on the Standalone Ind AS financial statement for the year ended March 31, 2017 have drawn attention with respect to:
i. Note No. 44 detailing about the Company Bellona Estate Developers Limited which ceased to be a subsidiary of the company from March 30, 2016 after invoking of Strategic Debt Restructuring (SDR). The Company has written off Rs.398.50 million as irrecoverable in the current Financial Year. The management has decided to write off its investments along with the outstanding loans after adjusting any dues against the same.
ii. Note No. 45 regarding Companyâs investment and loans and advances in Waterfront Developers Limited, where notice dated June 04, 2015 was received from Government of Mauritius for the termination of Lease Agreement entered on December 11, 2009 with Les Salines Development Limited (a step down subsidiary of Waterfront). In this case the process of arbitration has been initiated with the Government of Mauritius.
Our report is not modified with respect to above matter.
Other Matters
a) The comparative financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015, included in these Standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standard) Rules, 2006 on which we issued auditorâs reports to the shareholder of the company dated May 30, 2016 and June 15, 2015, respectively. Those Standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition of Ind AS, which have also been audited by us.
b) The Standalone Ind AS financial statements includes the financial statements of 3 joint operations which have not been audited by their auditors, whose financial statements have been prepared and certified by the Management.
These financial statements reflect the Net Total Assets of Rs.251.38 million as at March 31, 2017, Companyâs share in total revenue after elimination is Rs.471.76 million, total loss (net) after tax of Rs.28.95 million, total comprehensive income (net) of Rs. Nil and Net cash outflow amounting to Rs.21.13 million for the year ended on that date, as considered in these Standalone Ind AS financial statements. The separate set of financials of these joint operations for the year ended March 31, 2017, March 31, 2016 and the transition date opening Balance sheet as at April 1, 2015 is in accordance with accounting principles generally accepted in India, including Ind AS. The consequential effects, if any, arising out of the audit of those entities are not ascertainable presently.
c) The Standalone Ind AS financial statement also includes the financial statement of 9 joint operations which have been audited by other auditors, whose financial statement reflect the net total assets of Rs.596.33 million as at March 31, 2017, Companyâs share in total revenue after elimination is Rs.745.68 million, total loss (net) after tax of Rs.0.64 million, total comprehensive income (net) of Rs. Nil and Net cash inflow amounting to Rs.53.59 million for the year ended on that date, as considered in these Standalone Ind AS financial statements. The Company had prepared separate set of financials of these joint operations for the year ended March 31,2017, March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 in accordance with accounting principles generally accepted in India, including Indian Accounting Standards (Ind AS) and which have been audited for the year by the other auditors under generally accepted auditing standards applicable in India. These financial statements have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS. Our opinion in so far it relates to the amounts and disclosure in respect of these joint operations is solely based on the report of the other auditors.
d) Note No 35 with respect to merger of Patel Realty (India) Ltd, the erstwhile subsidiary, as per the order of National Company Law Tribunal (NCLT) dated July 6, 2017 with effect from April 1, 2016. Accordingly, the financial statements of the merged entity have been included as per the Ind AS 103 -Business Combination under âPooling of Interest Methodâ for the year ended March 31, 2017 and March 31, 2016 respectively. The Standalone Ind AS financials statements of the erstwhile subsidiary has been audited by the other auditors whose report has been furnished to us.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1) As required by âthe Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), 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, we give in the Annexure A, 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 purposes of our audit;
b) except for the matter described in the paragraph of âBasis of qualified opinionâ, 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 including other comprehensive income, the cash flow statement and statement of change in equity dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
e) on the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;
f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
g) with respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. the Company has disclosed the impact of pending litigations as at March 31, 2017 on its financial position in its Standalone Ind AS financial statements to the extent determinable/ascertainable. - Refer Note 46 to the Standalone Ind AS financial statements;
ii. the Company has made provision as at March, 31,2017 as required under the applicable law or accounting standard, for material foreseeable losses, if any, on long term contract.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as to holding as well as dealing in Specified Bank Note during the period from November 8, 2016 to December 30, 2016. Based on the audit procedure and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the management. Refer Note 10A(i) to the Standalone Ind AS financial statements.
ANNEXURE A TO INDEPENDENT AUDITORSâ REPORT
Referred to in paragraph 1 under âReport on Other Legal and Regulatory requirementâ section of our report of even date to the members of Patel Engineering Limited on the Standalone Ind AS Financial Statements for the year ended March 31, 2017.
i (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) During the year, fixed assets have been physically verified by the management at regular intervals and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties recorded as fixed assets in the books of accounts of the Company as on March 31, 2017 are held in the name of the Company, except for the details given below:
In respect of freehold lands with gross block and net block of Rs.30.45 million and building with gross block of Rs.5.53 million and net block of Rs.3.87 million in the name of directors and their relatives.
Ii As explained to us, the Inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
iii (A) According to the information and explanation given to us, the Companyâs has not granted any loan, secured or unsecured to companies, firms, limited liability partnership firm or other parties, covered in the register maintained under section 189 of the Companies Act 2013. Accordingly Paragraph 3 (iii)(a), 3 (iii)(b) and 3(iii)(c) of the order are not applicable to the Company.
(B) The Independent auditor of, Patel Realty (India) Ltd (âPRILâ), an erstwhile subsidiary company has reported that the company has granted loans to 7 subsidiaries and 1 associate, covered in the register maintained under section 189 of the Companies Act 2013:
a) The terms and conditions whereof are prima facie, not prejudicial to the interest of the company
b) These loans repayable on demand, there is no stipulation for repayment of the principal and interest. We are informed that the company has not demanded repayment of any such loans and interest during the year, and thus, there has been no default on the part of the parties to whom money has been lent. Also refer (c) below.
c) Except for the sum of Rs.556.60 millions receivable from subsidiaries which are written off, there is no overdue amount of loans granted to companies listed in the register maintained under section 189 of the Act.
iv In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013, to the extent applicable, in respect of the loans, investments, guarantees and security.
v The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly Paragraph 3(v) of the Order is not applicable to the Company.
Vi We have broadly reviewed the books of accounts maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost record under sub section (1) of section 148 of the Companies Act in respect to companyâs products/ services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii(a) According to the information and explanations given to us and for the records of the Company examined by us, undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income Tax, Sales tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues, as applicable, have been generally regularly deposited with the appropriate authorities except for the Sales Tax, Entry Tax, Service Tax, Municipality Tax, Income Tax and Professional Tax totaling to Rs.416.50 million outstanding as at March 31, 2017 for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, the disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:
|
Particulars |
Nature of the Dues |
Financial Year to |
Amounts in million |
Forum where dispute |
|
which amount relates |
(Rs.) |
is pending |
||
|
The Sales Tax Act |
Sales Tax |
2001-2002 to 2003-2004 |
14.99 |
Appellate Tribunal |
|
2005-2006, |
47.88 |
Appellate Tribunal, |
||
|
2006-2007, 2009-2010 |
Kolkata |
|||
|
and 2011-2012 |
||||
|
2007-2008 |
10.69 |
Deputy Commissioner Appellate -III, Mumbai |
||
|
2007-2008, |
13.16 |
Senior Joint |
||
|
2008-2009,2010-2011 |
Commissioner, Siliguri |
|||
|
and 2012-2013 |
||||
|
Entry Tax |
Entry Tax |
2015-2016 |
6.95 |
Joint Commissioner of Commercial Tax |
|
The Finance Act, 1994 |
Service Tax |
2007-2008 to 2012-2013 |
323.20 |
|
|
April 2003 to July |
2.54 |
|||
|
2006 |
Custom, Excise and |
|||
|
October 2009 to |
108.31 |
Service Tax Appellate |
||
|
September 2010 |
Tribunal (CESTAT) |
|||
|
June 2007 to |
651.88 |
|||
|
September 2009 |
||||
|
April 2010-March 2013 |
623.22 |
|||
|
April 2013 to March |
17.96 |
Appeal is yet to be |
||
|
2016 |
filed to CESTAT. |
|||
|
The Income Tax |
Income Tax |
2010-2011, 2011-2012 |
997.50 |
Commissioner of |
|
Act,1961 |
and 2013-2014 |
Income Tax (Appeals) |
||
|
2009-2010 and |
391.30 |
Income Tax Appellate |
||
|
2012-2013 |
Tribunal |
|||
|
With respect to merged Company (Patel Realty (I) Ltd). |
||||
|
The Finance Act, 1994 |
Service Tax |
November 2009 to June 2012 |
404.69 |
Custom, Excise and Service Tax Appellate Tribunal |
|
July 2012 to March 2014 |
41.49 |
|||
|
April 2014 to March |
65.58 |
Commissioner of |
||
|
2015 |
Service Tax |
|||
|
Income Tax Act, 1961 |
Income Tax |
2008-2009 to 2010-2011 |
Amount not quantified |
|
|
2011-2012 |
1.22 |
Commissioner of Income Tax (Appeals) |
||
|
2012-2013 |
1.12 |
|||
|
2013-2014 |
120.06 |
|||
|
3843.74 |
||||
viii There are no loans or borrowings payable to government. The Company has defaulted in repayment of following dues to the financial institution, banks and debenture holders during the year, which were paid on before the balance sheet date.
Debenture Holders Amounts in million (Rs.)
|
Particular |
Days |
Principal |
Interest |
|
Axis Bank Limited- Non-Convertible |
61-90 |
100.00 |
- |
|
GIC- Non-Convertible |
1-30 |
2.71 |
|
|
>90 |
- |
5.39 |
|
|
LIC- Non-Convertible |
>90 |
- |
42.50 |
|
Syndicate Bank-Non Convertible |
>90 |
- |
6.69 |
|
UCO Bank-Non Convertible |
>90 |
- |
10.03 |
Banks
Amounts in million (Rs.)
|
Particular |
Days |
Principal |
Letter of Credit/Bank Guarantees |
Interest |
|
Axis Bank Limited |
1-30 |
- |
246.23 |
7.47 |
|
31-60 |
- |
25.47 |
32.13 |
|
|
61-90 |
- |
- |
78.72 |
|
|
>90 |
- |
139.09 |
41.25 |
|
|
Bank of Baroda |
1-30 |
- |
77.44 |
12.92 |
|
31-60 |
- |
61.98 |
273.18 |
|
|
61-90 |
- |
- |
8.11 |
|
|
>90 |
- |
115.37 |
20.59 |
|
|
Bank of India |
1-30 |
- |
19.97 |
35.56 |
|
31-60 |
- |
- |
45.81 |
|
|
61-90 |
- |
- |
46.14 |
|
|
>90 |
- |
- |
255.85 |
|
|
Bank of Maharashtra |
1-30 |
- |
- |
2.06 |
|
31-60 |
14.36 |
- |
2.04 |
|
|
61-90 |
- |
- |
14.84 |
|
|
>90 |
56.25 |
198.89 |
106.46 |
|
|
Canara Bank |
1-30 |
- |
- |
65.03 |
|
31-60 |
- |
- |
43.17 |
|
|
61-90 |
- |
- |
25.82 |
|
|
>90 |
- |
- |
75.02 |
|
|
Corporation Bank |
1-30 |
- |
- |
17.29 |
|
31-60 |
- |
- |
18.23 |
|
|
61-90 |
- |
- |
16.33 |
|
|
>90 |
- |
- |
94.86 |
|
|
DBS Bank Limited |
1-30 |
15.08 |
- |
1.05 |
|
61-90 |
- |
- |
0.60 |
|
|
>90 |
60.25 |
- |
183.63 |
|
|
Dena Bank |
1-30 |
- |
- |
11.21 |
|
31-60 |
- |
- |
11.90 |
|
|
61-90 |
- |
- |
23.62 |
|
|
>90 |
- |
49.97 |
251.11 |
|
Exim Bank |
1-30 |
83.57 |
- |
60.95 |
|
31-60 |
- |
- |
23.66 |
|
|
61-90 |
- |
- |
12.06 |
|
|
>90 |
- |
- |
11.72 |
|
|
HDFC Bank Limited |
61-90 |
4.34 |
- |
1.10 |
|
>90 |
31.46 |
- |
6.64 |
|
|
ICICI Bank Limited |
1-30 |
- |
29.83 |
40.41 |
|
31-60 |
- |
1105.04 |
65.96 |
|
|
61-90 |
- |
- |
13.96 |
|
|
>90 |
90 |
- |
||
|
IDBI Bank Limited |
1-30 |
- |
53.96 |
196.66 |
|
31-60 |
- |
- |
6.44 |
|
|
61-90 |
- |
12.24 |
||
|
>90 |
- |
- |
6.44 |
|
|
Indusind Bank limited |
1-30 |
- |
- |
15.54 |
|
31-60 |
- |
- |
15.34 |
|
|
61-90 |
- |
- |
7.60 |
|
|
>90 |
- |
- |
23.10 |
|
|
Ratnakar Bank Limited |
1-30 |
- |
- |
7.07 |
|
31-60 |
- |
- |
5.84 |
|
|
61-90 |
- |
- |
2.53 |
|
|
>90 |
- |
- |
5.71 |
|
|
Society General Bank |
31-60 |
- |
- |
11.73 |
|
>90 |
- |
- |
28.28 |
|
|
Standard Chartered Bank |
1-30 |
- |
- |
5.87 |
|
31-60 |
- |
- |
15.74 |
|
|
61-90 |
- |
- |
15.43 |
|
|
>90 |
- |
- |
100.28 |
|
|
State Bank of Patiala |
1-30 |
252.80 |
- |
118.69 |
|
61-90 |
20.58 |
- |
20.74 |
|
|
Union Bank of India |
30-Jan |
- |
- |
0.84 |
|
31-60 |
- |
- |
0.86 |
|
|
>90 |
- |
- |
0.33 |
Financial Institutions
Amounts in million (Rs.)
|
Particular |
Days |
Principal |
Interest |
|
KIC Food Product P Ltd. |
1-30 |
- |
5.39 |
|
Viniyog Investment and Trade |
1-30 |
50.42 |
8.95 |
|
Srei Equipment Finance Ltd. |
1-30 |
8.13 |
7.17 |
|
31-60 |
8.13 |
7.42 |
|
|
61-90 |
8.13 |
1.34 |
|
|
>90 |
8.13 |
6.46 |
|
|
Tata Motors Finance Ltd |
1-30 |
2.26 |
0.07 |
|
>90 |
0.39 |
- |
The Company has defaulted in repayment of following dues to the financial institution, banks and debenture holders during the year, which were not paid as at the balance sheet date:
Debenture Holders
Amounts in million (Rs.)
|
Particular |
Days |
Principal |
Interest |
|
Axis Bank limited- Non-Convertible |
61-90 |
- |
15.36 |
|
>90 |
500.00 |
58.68 |
|
|
IDBI Bank Limited- Non-Convertible |
>90 |
150.00 |
38.10 |
|
LIC- Non-Convertible |
1-30 |
- |
41.79 |
|
>90 |
- |
124.30 |
|
|
UCO Bank- Non-Convertible |
>90 |
150.00 |
18.71 |
|
Corporation Bank- Non-Convertible |
>90 |
150.00 |
19.02 |
|
GIC- Non-Convertible |
>90 |
100.00 |
- |
|
Syndicate Bank- Non-Convertible |
>90 |
100.00 |
12.31 |
Banks
Amounts in million (Rs.)
|
Particular |
Days |
Principal |
Letter of Credit/Bank Guarantees |
Interest |
|
Axis Bank Limited |
1-30 |
43.13 |
- |
- |
|
31-60 |
- |
342.05 |
68.84 |
|
|
61-90 |
- |
- |
33.72 |
|
|
>90 |
31.88 |
184.12 |
145.16 |
|
|
Bank of Baroda |
31-60 |
- |
57.51 |
- |
|
61-90 |
- |
14.43 |
- |
|
|
>90 |
- |
597.82 |
- |
|
|
Bank of India |
31-60 |
- |
- |
91.85 |
|
61-90 |
56.25 |
- |
25.90 |
|
|
>90 |
- |
769.96 |
1.86 |
|
|
Bank of Maharashtra |
1-30 |
- |
- |
5.81 |
|
31-60 |
- |
- |
55.65 |
|
|
61-90 |
56.25 |
- |
29.94 |
|
|
>90 |
41.89 |
- |
129.00 |
|
|
Canara Bank |
1-30 |
- |
- |
6.26 |
|
Corporation Bank |
31-60 |
- |
627.37 |
10.05 |
|
DBS Bank Limited |
31-60 |
- |
- |
50.22 |
|
61-90 |
- |
- |
24.44 |
|
|
>90 |
- |
- |
49.41 |
|
|
Dena Bank |
31-60 |
- |
- |
57.90 |
|
61-90 |
500.00 |
- |
37.98 |
|
|
>90 |
750.00 |
- |
31.57 |
|
|
Exim Bank |
1-30 |
112.50 |
- |
- |
|
31-60 |
150.00 |
- |
10.99 |
|
|
61-90 |
150.00 |
- |
- |
|
|
>90 |
66.43 |
- |
- |
|
|
HDFC Bank Limited |
1-30 |
4.90 |
- |
0.96 |
|
31-60 |
4.86 |
- |
0.58 |
|
|
61-90 |
4.82 |
- |
0.63 |
|
|
>90 |
18.86 |
- |
2.91 |
|
|
ICICI Bank Limited |
31-60 |
- |
- |
64.36 |
|
61-90 |
30.00 |
424.95 |
32.18 |
|
|
>90 |
- |
524.94 |
41.37 |
|
IDBI Bank Limited |
1-30 |
- |
- |
16.91 |
|
31-60 |
- |
339.22 |
19.70 |
|
|
61-90 |
- |
- |
29.68 |
|
|
>90 |
- |
- |
148.06 |
|
|
Indusind Bank Limited |
31-60 |
29.88 |
- |
14.13 |
|
61-90 |
45.97 |
- |
7.17 |
|
|
Ratnakar Bank Limited |
31-60 |
- |
- |
9.35 |
|
61-90 |
- |
- |
5.51 |
|
|
>90 |
- |
- |
33.76 |
|
|
Society General Bank |
31-60 |
- |
- |
17.77 |
|
61-90 |
- |
- |
9.21 |
|
|
>90 |
- |
- |
71.77 |
|
|
Standard Chartered Bank |
1-30 |
- |
- |
12.35 |
|
31-60 |
- |
- |
38.28 |
|
|
61-90 |
- |
- |
24.31 |
|
|
>90 |
93.04 |
- |
171.30 |
|
|
State Bank of Patiala |
1-30 |
- |
- |
3.32 |
ix According to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments).
x During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to information and explanation given to us, we have neither come across any instance of fraud on or by the Company, its officers or employees, noticed or reported during the period, nor have we been informed of such case by the management.
xi According to the information and explanations given to us, the Company has paid or provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
Xii In our opinion and according the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
xiii According to the information and explanation given to us and based on our verification of the records of the Company and on the basis of review and approval by the Board and Audit Committee, the transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in the Standalone Ind AS financial statements as required by the applicable accounting standards.
xiv According to the information and explanation given to us and based on our examination of the records of the Company, the Company has made preferential allotment of equity share during the year to the lenders as per Strategic Debt Restructuring Scheme (SDR) as stated in note no 34 of the Standalone Ind AS financial statements. In our opinion, the Company has complied with the requirements of section 42 of the Act and Rules framed there under. The amounts so raised have been used for the purposes for which the funds were raised. However, the Company has not made any private placement of shares or fully or partly convertible debentures during the year under review.
xv According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with them during the year. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
xvi The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
For Vatsaraj & Co.
Chartered Accountants
Firm Registration Number: 111327W
CA Dr. B. K. Vatsaraj
Partner
Membership Number: 39894
Mumbai,
July 24, 2017
Mar 31, 2016
TO THE MEMBERS OF PATEL ENGINEERING LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Patel Engineering Limited (âthe Company"), which comprise the Balance Sheet as at March 31, 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 Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Act") with respect to the preparation of these standalone financial statements to 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 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone 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 standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, 2016, and its loss and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to:
(a) Note no 4.1 to the standalone financial statements, As per Section 71 of Companies Act, 2013 the Company has created adequate Debenture Redemption Reserve for the Secured Redeemable Non-Convertible Debenture issued by the Company. However, in terms of Section 71 read with Rule 18(7)(''C) of Companies Share Capital and Debentures Rules, 2014, the Company has not made the required deposit/ investment to secure the repayment of debentures maturing during 2015-16. 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, 2016'', issued by the Central Government of India in terms of subsection (11) of section 143 of the Act (hereinafter referred to as the âOrder"), 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, we give in the Annexure A, 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 purposes of our audit;
b) 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) in our opinion, the aforesaid standalone 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 the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;
f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure B"; and
g) with respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. the Company has disclosed the impact of pending litigations as at March 31, 2016 on its financial position in its standalone financial statements to the extent determinable/ascertainable. - Refer
Note 41 to the standalone financial statements;
ii. the Company has made provision as at March,31,2016 as required under the applicable law or accounting standard, for material foreseeable losses, if any, on long term contract.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2016.
Referred to in paragraph 1 under "Report on Other Legal and Regulatory requirement" section of our report of even date to the members of Patel Engineering Limited on the Standalone Financial Statements for the year ended March 31, 2016.
i (a) The Company has maintained proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) During the year, fixed assets have been physically verified by the management at regular intervals and no material discrepancies were noticed on such verification.
(c ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties recorded as fixed assets in the books of accounts of the Company as on March 31, 2016 are held in the name of the Company, except for the details given below:
In respect of Freehold lands with gross block and net block of Rs. 30.45 million and Building with gross block of Rs. 5.53 million and net block of Rs. 3.96 million.
ii The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.
iii According to information and explanation given to us, the Company''s has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnership firm or other parties, covered in the register maintained under section 189 of the Companies Act 2013 . Accordingly Paragraph 3 (iii)(a), 3 (iii)(b) and 3(iii)(c) of the Order are not applicable to the Company.
iv In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013, to the extent applicable, in respect of the loans, investments, guarantees and security.
v The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly Paragraph 3(v) of the Order is not applicable to the Company.
vi We have broadly reviewed the books of accounts maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost record under sub section (1) of section 148 of the Companies Act in respect to company''s products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete
vii (a) According to the information and explanations given to us and the records of the Company examine by us, undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues, as applicable, have been generally regularly deposited with the appropriate authorities except for the Sales Tax, Entry Tax, Service Tax, Municipality Tax, Income Tax and Professional Tax amounting to '' 280.17 million outstanding as on the last day of the financial year for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us and the records of the Company examine by us, the disputed statutory dues aggregating Rs. 3514.50 Million that have not been deposited on account of disputed matters pending before appropriate authorities are as under:
|
Particulars |
Financial Year to which amount relates |
Amounts in Million (Rs.) |
Forum where dispute is pending |
|
The Sales Tax Act |
2001-2002 to 2003-2004 |
14.99 |
Appellate Tribunal |
|
2005-2006 |
0.50 |
Joint Commissioner of Sales tax (A)-II, Mumbai |
|
|
2005-2006, 2006-2007 and 20092010 |
32.78 |
Appellate Tribunal, Kolkata |
|
|
2007-2008 |
10.74 |
Deputy Commissioner Appellate -III, Mumbai |
|
|
2007-2008, 2008-2009 and 20102011 |
28.26 |
Senior Joint Commissioner , Siliguri |
|
|
Entry Tax |
2010-2011 |
7.57 |
High Court |
|
The Finance Act, 1994 |
2007-2008 to 2012-2013 |
323.20 |
Custom , Excise and Service Tax Appellate Tribunal |
|
April 2003 to July 2006 |
2.54 |
||
|
October 2009 to September 2010 |
108.31 |
||
|
June 2007 to September 2009 |
631.88 |
||
|
The Income Tax Act,1961 |
2007-2008 to 2009-2010 and 2011-2012 to 2012-2013 |
2353.73 |
Commissioner of Income Tax (Appeals) |
|
3514.50 |
viii There are no loans or borrowings payable to government. The Company has defaulted in repayment of following dues to the financial institution, banks and debenture holders during the year, which were paid on before the balance sheet date.
Debenture Holders (Rs. in Millions)
|
Days |
Principal |
Interest |
|
|
Axis Bank - Non-Convertible |
1-30 |
- |
22.90 |
|
31-60 |
- |
13.10 |
|
|
61-90 |
500.00 |
54.91 |
|
|
GIC- Non-Convertible |
90 |
- |
0.03 |
|
LIC- Non-Convertible |
1-30 |
- |
6.74 |
|
61-90 |
- |
44.22 |
|
|
90 |
- |
37.19 |
Banks (Rs. in Millions)
|
Days |
Principal |
Letter of Credit |
Interest |
|
|
DBS Bank |
1-30 |
- |
- |
48.96 |
|
31-60 |
1545.67 |
- |
61.26 |
|
|
61-90 |
122.00 |
- |
118.81 |
|
|
HDFC Bank |
1-30 |
- |
- |
1.50 |
|
31-60 |
4.05 |
- |
2.86 |
|
|
61-90 |
33.35 |
- |
10.19 |
|
|
Canara Bank |
1-30 |
8.99 |
- |
75.67 |
|
31-60 |
0.25 |
- |
12.92 |
|
|
Bank Of Baroda |
1-30 |
- |
882.39 |
98.46 |
|
31-60 |
- |
131.20 |
26.07 |
|
|
Bank of India |
1-30 |
48.95 |
398.52 |
124.92 |
|
31-60 |
7.82 |
1095.17 |
110.06 |
|
|
61-90 |
2.30 |
- |
64.84 |
|
|
IDBI Bank |
1-30 |
75.00 |
- |
92.68 |
|
31-60 |
- |
57.67 |
||
|
61-90 |
- |
- |
42.93 |
|
|
Bank of Maharashtra |
1-30 |
1.20 |
278.28 |
344.35 |
|
31-60 |
- |
51.55 |
176.52 |
|
|
Ratnakar Bank |
1-30 |
- |
- |
2.74 |
|
31-60 |
- |
- |
5.51 |
|
|
Axis Bank |
1-30 |
- |
211.36 |
25.18 |
|
31-60 |
- |
80.00 |
44.62 |
|
|
61-90 |
- |
127.60 |
43.83 |
|
|
Dena Bank |
1-30 |
250.00 |
149.91 |
154.44 |
|
31-60 |
- |
- |
146.52 |
|
|
61-90 |
569.21 |
- |
190.01 |
|
|
Indusind bank |
1-30 |
- |
- |
22.02 |
|
31-60 |
- |
- |
21.79 |
|
|
61-90 |
- |
- |
13.70 |
|
|
State Bank of Patiala |
1-30 |
- |
- |
36.26 |
|
ICICI Bank |
1-30 |
- |
1402.57 |
70.18 |
|
31-60 |
- |
648.94 |
24.42 |
|
|
61-90 |
- |
181.54 |
- |
|
|
Society General Bank |
1-30 |
- |
- |
54.83 |
|
31-60 |
- |
- |
5.03 |
|
|
61-90 |
- |
- |
41.60 |
|
|
Standard Chartered Bank |
1-30 |
47.00 |
- |
80.52 |
|
31-60 |
- |
- |
102.18 |
|
|
61-90 |
- |
- |
71.35 |
|
|
Exim Bank |
1-30 |
- |
- |
83.75 |
|
Corporation Bank |
1-30 |
- |
- |
51.53 |
|
31-60 |
- |
- |
16.13 |
Financial Institutions (Rs. in Millions)
|
Days |
Principal |
Interest |
|
|
Sicom India Ltd |
1-30 |
- |
18.57 |
The Company has defaulted in repayment of following dues to the financial institution, banks and debenture holders during the year, which were not paid as at the balance sheet date:
Debenture Holders (Rs. in Millions)
|
Days |
Principal |
Interest |
Total |
|
|
GIC- Non-Convertible |
1-30 |
100.00 |
43.66 |
143.66 |
|
Axis Bank |
1-30 |
100.00 |
39.10 |
139.10 |
Banks (Rs. in Millions)
|
Days |
Principal |
Letter of Credit |
Interest |
Total |
|||
|
DBS Bank |
1-30 |
- |
- |
9.59 |
9.59 |
||
|
31-60 |
- |
- |
0.11 |
0.11 |
|||
|
61-90 |
- |
- |
0.11 |
0.11 |
|||
|
HDFC Bank |
1-30 |
4.42 |
- |
1.03 |
5.45 |
||
|
31-60 |
4.38 |
- |
1.07 |
5.45 |
|||
|
61-90 |
4.34 |
- |
1.10 |
5.44 |
|||
|
Canara Bank |
1-30 |
- |
- |
7.72 |
7.72 |
||
|
Bank of Baroda |
1-30 |
- |
257.52 |
7.59 |
265.11 |
||
|
31-60 |
- |
6.21 |
- |
6.21 |
|||
|
Bank of India |
31-60 |
- |
22.04 |
30.38 |
52.42 |
||
|
IDBI Bank |
31-60 |
400.00 |
- |
4.15 |
404.15 |
||
|
Bank of Maharashtra |
1-30 |
- |
- |
0.46 |
0.46 |
||
|
31-60 |
- |
- |
11.16 |
11.16 |
|||
|
Ratnakar Bank |
31-60 |
- |
- |
2.43 |
2.43 |
||
|
Axis Bank |
1-30 |
- |
25.00 |
2.39 |
27.39 |
||
|
31-60 |
- |
- |
28.32 |
28.32 |
|||
|
Dena Bank |
1-30 |
- |
- |
0.02 |
0.02 |
||
|
Society General Bank |
31-60 |
- |
- |
22.73 |
22.73 |
||
|
Standard Chartered Bank |
31-60 |
- |
- |
34.10 |
34.10 |
|
61-90 |
12.39 |
- |
0.30 |
12.69 |
|
|
>90 |
82.62 |
- |
2.82 |
85.44 |
|
|
ICICI Bank |
1-30 |
22.50 |
73.39 |
- |
95.89 |
|
Corporation Bank |
1-30 |
- |
- |
0.26 |
0.26 |
ix The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). According to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.
x During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to information and explanation given to us, we have neither come across any instance of fraud on or by the Company, its officers or employees, noticed or reported during the period, nor have we been informed of such case by the management.
xi According to the information and explanations given to us, the Company has paid or provided for managerial remuneration in accordance with the requisite approvals mandated by
the provisions of Section 197 read with Schedule V to the Act.
xii In our opinion and according the information and explanation given to us, the Company is not a Nidhi Company.
Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
xiii According to the information and explanation given to us
and based on our verification of the records of the Company and on the basis of review and approval by the Board and Audit Committee, the transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.
xiv According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
xv According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with them during the year. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
xvi The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Referred to in paragraph 2(f) under "Report on Other Legal and Regulatory requirement" section of our report of even date to the members of Patel Engineering Limited on the Standalone Financial Statements for the year ended March 31, 2016. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
1. We have audited the internal financial controls over financial reporting of Patel Engineering Limited (âthe Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that
i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial
Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Vatsaraj & Co.
Chartered Accountants
Firm Registration Number: 111327W
CA B. K. Vatsaraj
Partner
Membership Number: 39894
May 30, 2016
Mumbai
Mar 31, 2015
1. We have audited the accompanying financial statements of Patel
Engineering Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2015, the Statement of Profit and Loss and the 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
2. The Company's Board of Directors is responsible for the matters
stated in section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these standalone 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(as amended). This
responsibility also includes the maintenance of adequate accounting
records in accordance with the provision of the Act for safeguarding of
the assets of the Company and for preventing and detecting the 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 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.
Auditors' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit.
4. We have taken into account the provisions of the Act & the Rules
made there under including the accounting standards & matters which are
required to be included in the audit report under the provisions of the
Act and the Rules made there under.
5. We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act & other applicable
authoritative pronouncements 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 standalone financial statements
are free from material misstatement.
6. 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 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 systems over financial reporting and the operating
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 Director, as well as
evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, 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, of the state of affairs of the Company as
at March 31, 2015, and its profit and its cash flows for the year ended
on that date.
Report on other Legal and Regulatory Requirements
9. As required by Companies (Auditor's Report) Order, 2015 issued by
the Central government of India in terms of sub-section (11) of the
section 143 of the act (hereinafter referred to as the "Order"), and on
the basis of such checks of the books & records of the company as we
considered appropriate & according to the information & explanation
given to us, we give in the annexure a statement on the matters
specified in paragraph 3 and 4 of the Order.
10. 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
purposes 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, the Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account of the company.
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, 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 & Auditors)
Rules, 2014, In our opinion & to the best of our knowledge & belief &
according to information & explanations given to us:
i) The company has disclosed the impact of pending litigations as at
March 31, 2015 on its financial position, in its financial statements.
ii) Company has made provision as at March, 31, 2015 as required under
the applicable law or accounting standards, for material foreseeable
losses, if any, on long term contracts including derivative contracts.
iii) There has been no delay in transferring amounts, required to be
transferred, to the investor education & protection fund by the company
during the year ended 31st March 2015.
The Annexure referred to in paragraph 1 of the Our Report of even date
to the members of Patel Engineering Limited for the year ended 31st
March, 2015.
1 a) The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
b) We have been informed to that, the fixed assets including assets of
the company purchased in the name of Directors and their relatives and
employees have been physically verified at reasonable intervals by the
management and no material discrepancies were noticed on such
verifications.
2 a) The Inventory has been physically verified by the management at
reasonable intervals during the year. In our opinion, the frequency of
such verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories. As explained to us, there was no material discrepancies
noticed on physical verification of inventories as compared to book
records.
3 The Company has granted unsecured loans to 33 companies and 2 firms
which are covered in the register maintained under section 189 of the
Companies Act, of which the net balance of Rs. 419.2 million of a
company has been written off during the year.
a) As per information and explanation given to us, the above loans are
repayable on demand, there is no time stipulation for repayment of the
Principal and interest. We are also informed that the company has not
demanded repayment of either principal or interest during the year.
b) There is no overdue amount in excess of Rs. 1 lac on loans granted
remaining outstanding as at the year end, as they are repayable on
demand.
4 In our opinion and 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 the
business for purchase of fixed assets and for sale of goods and
services. However the internal controls over purchases of inventory
continues to be strengthened further.
5 In our opinion and according to the information and explanations
given to us the company has not accepted deposits during the year.
6 We have broadly reviewed the cost records maintained by the company
as specified by Central Government under sub section (1) of section 148
of the Companies Act, and we are of opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
7 a) According to information & explanation given to us and the records
of the company examined by us, undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees'
State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom
Duty, Excise Duty, Cess and any other statutory dues have been
generally regularly deposited with the appropriate authorities except
for the Sales Tax, Entry Tax, Service Tax, Municipality Tax, and Income
Tax amounting to Rs. 180.05 million outstanding as on the last day of
the financial year for a period of more than six months from the date
they become payable.
7 b) According to information & explanation given to us & the records
of the company examined by us, the disputed statutory dues aggregating
Rs. 3,359.24 Million that have not been deposited on account of
disputed matters pending before appropriate authorities are as under:
Particulars Financial Year to which Amounts in
amount relates Million (Rs.)
Sales Tax 2001-2002 to 2003-2004, 2005-2006, 49.86
2006-07 and 2009-2010
2007-2008 11.63
2007-2008, 2008-2009 and 2010-2011 9.61
Entry Tax 2010-2011 7.57
Service Tax 2007-2008 to 2012-2013 323.20
2003-2004 to 2006-2007 2.54
2008-2009 to 2009-2010 108.31
2007-2008 to 2008-2009 631.88
Income Tax 2007-2008 to 2009-2010 and 2011-2012 2205.48
Custom Duty 2011-2012 9.16
Total 3359.24
Particulars Forum where dispute is pending
Sales Tax Appellate Tribunal
Dy Commissioner Appellate ÂIII, Mumbai
Senior Joint Commissioner, Siliguri
Entry Tax High Court
Service Tax CESTAT, New Delhi
CESTAT, Mumbai
CESTAT, Bangalore
CESTAT, Bangalore
Income Tax CIT Appellate
Custom Duty Appellate Tribunal
c) The amount required to be transferred to Investor Education &
Protection fund has been transferred within the stipulated time in
accordance with the relevant provisions of the Companies Act,1956 (1 of
1956) and rules made there under
8 The company does not have any accumulated losses at the end of the
financial year and the company has not incurred cash losses in current
financial year and in the immediately preceding financial year;
9 According to the information and explanations given to us, the
Company has delayed payment of principal and interest dues to banks,
financial institutions and debenture holders. During the year, the
delay in interest servicing is: less than 60 days Rs. 1892 Million and
more than 60 days Rs. 585 Million. Such delay in payment of principal
is Rs. 1452 Million and Rs. 959 Million respectively. The dues were
subsequently paid during the year.
At the balance sheet date, the delay in interest servicing is less than
60 days Rs. 161.85 Million and more than 60 days Rs. 24.05 Million. The
delay in principal payment for less than 60 days is Rs. 360 Million.
10 In our opinion and according to the information and explanations
given to us, the Company has given guarantees for loan taken by others
from a bank or financial institution. The terms and conditions thereof
are not prima facie prejudicial to the interest of the Company.
11 According to the information and explanations given to us the term
loans were applied for the purpose.
12 According to the information and explanations given to us, no fraud
on or by the company has been noticed or reported during the course of
our audit.
For Vatsaraj & Co.
Chartered Accountants
FRN: 111327W
CA Mayur Kisnadwala
Place : Mumbai Partner
Date : June 15, 2015 M. No.: 33994
Mar 31, 2014
1. We have audited the accompanying financial statements of Patel
Engineering Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2014, the Statement of Profit and Loss and the 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
2. The Company''s 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 flow of the Company in
accordance with the Accounting Standards notified under the Companies
Act, 1956 (the Act) read with the General Circular 15/2013 dated
September 13, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013 and in accordance with the
accounting principles generally accepted in India. 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.
Auditors'' Responsibility
3. 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.
4. 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 Company''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.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. 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:
(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 of
the Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on other Legal and Regulatory Requirements
7. As required by the Companies (Auditors'' Report) Order, 2003 issued
by the Central Government of India in terms of Sub-Section (4A) of
Section 227 of the Act, and on the basis of such checks as we
considered appropriate and according to the information and
explanations given to us, we annex hereto a statement on the matter
specified in paragraphs 4 and 5 of the said Order.
8. 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 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, the Statement of Profit and Loss, and the Cash
Flow Statement of the Company dealt with by this report are in
agreement with the books of accounts of the Company;
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with Accounting Standards
notified under the Act read with the General Circular 15/2013 dated
September 13, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013.
(e) On the basis of the written representations received from the
directors as on March 31, 2014, 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 Section 274(1) (g) of
the Act.
Annexure To Independent Auditors'' Report
(Referred to in paragraph 1 under the heading of "report on other legal
and regulatory requirements" of our report of even date:
(i) In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) We have been informed that, the fixed assets including assets of the
Company purchased in the name of Directors and their relatives and
employees have been physically verified at reasonable intervals by the
Management and no material discrepancies were noticed on such
verifications.
c) Fixed Assets disposed off during the year were not substantial and
therefore do not affect the going concern status of the Company.
(ii) In respect of its Inventories:
a) As explained to us, the inventories were physically verified during
the year by the management at reasonable intervals.
b) In our opinion and on the basis of information and explanations
given to us, the procedures of physical verification of inventories
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 has maintained proper records of inventories. We have
been informed by the management, that the discrepancies between the
physical stock and book records were not material.
(iii) In respect of the loans, secured or unsecured, granted or taken
by the Company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has granted unsecured loans, at call, to two companies
(including interest free loan to one company) covered in the register
maintained under section 301 of the Companies Act 1956, aggregating to
a maximum outstanding of Rs. 963.193 million during the year and Rs.
963.193 million outstanding at the year end.
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are prima facie not prejudicial to the
interest of the Company.
c) The receipt of principal amounts and interest are at call.
d) There is no overdue amount in respect of the above loans.
e) The Company has taken interest free unsecured loans from two LLP
Firms covered in the register maintained under section 301 of the
Companies Act 1956, aggregating to a maximum outstanding of Rs. 447.75
million during the year and Rs. 37.75 Million outstanding at the year
end.
f) In our opinion, other terms & conditions are prima facie not
prejudicial to the interest of the Company.
g) According to the information and explanations given to us,
repayments of the principal have been regularly made as stipulated.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for work
executed. However the internal controls over accounting of purchases of
inventory/fixed assets and consumption needs to be strengthened.
(v) In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act 1956 have been entered in the
register required to be maintained under that section.
b) As explained to us, the transactions made in pursuance of such
contracts or arrangements and exceeding the value of Rs. 5,00,000/- in
respect of any party during the year are at a negotiated price, fixed
at reasonable levels, having regard to the technical
requirements/quality consideration and alternate source of
availability. There are no comparable transactions with the Company of
similar nature.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits from public and
consequently, the directives issued by the Reserve Bank of India and
the provision of section 58(A), 58(AA) or any other relevant provisions
of the Companies Act 1956 and the rules framed there under are not
applicable.
(vii) The internal audit function is carried out by a firm of
independent Chartered Accountants appointed by the management and is
commensurate with the size of the Company and the 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 of India,
regarding the maintenance of cost records under clause (d) of
Subsection (1) of Section 209 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been maintained.
We have, however not made a detailed examination of the records with a
view to determine whether they are accurate or complete.
(ix) In respect of Statutory dues:
a) As per information and explanations given to us, the Company is
generally regular in depositing undisputed statutory dues including
Wealth tax, Provident fund, investor education and protection fund,
Custom duty, excise duty and Cess with the appropriate authorities
except for Sales tax, Service tax and Income tax deducted at source,
dues aggregating to Rs. 22.390 million outstanding for period exceeding
six months as at the year end.
b) According to the information and explanations given to us, details
of dues of sales tax, wealth tax, service tax, custom duty, excise duty
and cess which have not been deposited as on March 31, 2014 on account
of disputes are given below:
Particulars Financial year to Forum where dispute Rs. in
which amount relates is pending Million
Cess 2007-2008 and 2008-2009 High Court 53.70
Sales Tax 2001-2002 to 2003-2004 Appellate Tribunal 57.65
Entry Tax 2010-2011 High Court 11.35
Service Tax December 2005 to
September 2009 Appellate Tribunal 654.55
Income Tax 2004-2005 to 2010-2011 High Court 935.06
x. The Company does not have any accumulated losses as at the end of
the financial year. The Company has not incurred cash losses during the
financial year and in the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions or banks or to debenture holder as at the
balance-sheet date.
xii. In our opinion and 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 chit/nidhi/mutual benefit fund/society.
Accordingly, Clause 4(xiii) of the order is not applicable.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investment. Accordingly, Clause 4(xiv) of the
order is not applicable.
xv. In our opinion and according to the information and explanations
given to us, the Company has given guarantee for loans taken by others
from Banks or Financial Institutions. The terms and conditions thereof
are not prima-facie prejudicial to the interest of the Company.
xvi. In our opinion and according to the information and explanations
given to us and on an overall examination, the term loans have been
applied for the purpose for which they were raised.
xvii. On the basis of our examination of books of accounts and
information and explanations given to us, in our opinion, the funds
raised on a short term basis have not been used for long term
investment.
xviii. During the year, the Company has made preferential allotment of
shares to parties covered in the register maintained Under Section 301
of the Act. The price at which the shares have been issued has been
determined as per the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirement) Regulations, 2009, which in our
opinion is not prejudicial to the interest of the Company.
xix. The Company has created securities/charges in respect of secured
debentures issued.
xx. The Company has not raised any money by public issue during the
year.
xxi. During the course of our audit carried out in accordance with the
generally acceptable auditing practices and as informed by the
Management, no fraud on or by the Company has been noticed or reported
during the year.
For Vatsaraj & Co.
Chartered Accountants
FRN: 111327W
CA Mayur Kisnadwala
Mumbai Partner
May 30, 2014 M. No. 33994
Mar 31, 2013
REPORT ON THE FINANCIAL STATEMENTS
1. We have audited the accompanying financial statements of Patel
Engineering Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2013, the Statement of Profit and Loss and the 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
2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position and financial performance of the Company in
accordance with 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.
AUDITORS'' RESPONSIBILITY
3. 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.
4. 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.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
OPINION
6. In our opinion and to the best of our information and according to
the explanations given to us, 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 Profit and Loss Account, 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.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
7. As required by the Companies (Auditors'' Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, and on the basis of such checks
as we considered appropriate and according to the information and
explanations given to us, we annex hereto a statement on the matter
specified in paragraphs 4 and 5 of the said Order.
8. Further to our comments in the Annexure referred to 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 purpose 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, the Statement of Proft and Loss Account and the
Cash Flow Statement of the Company dealt with by this report are in
agreement with the books of accounts of the Company;
(d) in our opinion, the Balance Sheet, the Statement of Proft and Loss
Account and the 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) on the basis of written representations received form the
Directors, as on March 31, 2013 and taken on record by the Board of
Directors, we report that none of the Director is disqualifed 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;
i. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fxed
assets.
b) We have been informed that, the fxed assets including assets of the
Company purchased in the name of Directors and their relatives and
employees have been physically verifed at reasonable intervals by the
Management and no material discrepancies were noticed on such
verifcations
c) Fixed Assets disposed off during the year were not substantial and
therefore do not affect the going concern status of the Company.
ii. a) Physical verifcation of inventories has been conducted at
reasonable intervals by the management.
b) In our opinion and on the basis of information and explanations
given to us, the procedures of physical verifcation 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 has maintained proper records of inventory. We have been
informed by the management, that the discrepancies between the physical
stock and book records were not material.
iii. a) The Company has granted unsecured loan at call to two
companies covered in the register maintained under section 301 of the
Companies Act 1956, aggregating to a maximum outstanding of Rs. 265.08
million during the year and Rs. 164.52 million outstanding at the year
end.
b) In our opinion, the rate of interest and other terms & conditions
are prima facie not prejudicial to the interest of the Company.
c) The receipt of principal amounts and interest are at call.
d) There is no overdue amount in respect of the above loan.
e) The Company has taken interest free unsecured loans from a Company
and two LLP Firms covered in the register maintained under section 301
of the Companies Act 1956, aggregating to a maximum outstanding of
Rs. 1,899.09 million during the year and
Rs. 399.09 million outstanding at the year end.
f) In our opinion, other terms & conditions are prima facie not
prejudicial to the interest of the Company.
g) The principal amounts have been paid during the year.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fxed assets and for work executed and we have
not observed any continuing failure to correct major weakness in such
internal control system
v. a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act 1956, have been entered in the
register required to-be maintained under that section.
b) As explained to us, the transactions made in pursuance of such
contracts or arrangements and exceeding the value of Rs. 5,00,000/- in
respect of any party during the year are at a negotiated price, fxed at
reasonable levels, having regard to the technical requirements/ quality
consideration and alternate source of availability. There are no
comparable transactions with the Company of similar nature.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits from public and
consequently, the directives issued by the Reserve Bank of India and
the provision of section 58(A), 58(AA) or any other relevant provisions
of the Companies Act, 1956 and the rules framed there under are not
applicable.
vii. The internal audit function is carried out by a firm of
independent Chartered Accountants appointed by the management and is
commensurate with the size of the Company and the 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 of India,
regarding the maintenance of cost records under clause (d) of
subsection (1) of Section 209 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been maintained.
We have, however not made a detailed examination of the records with a
view to determine whether they are accurate or complete.
ix. a) As per information and explanation given to us, the Company is
generally regular in depositing undisputed statutory dues, in respect
of Provident Fund, Investor Education and Protection Fund, Income tax,
sales tax, service tax, Wealth Tax, Excise Duty, Cess and other
statutory dues with the appropriate authorities. Though there has been
delay of Rs. 86.78 million of statutory dues outstanding beyond six
months, pending expert opinion. (Refer note # 26).
B) According to the information and explanations given to us, details
of dues of sales tax, wealth tax, service tax, custom duty, excise duty
and cess which have not been deposited as on March 31, 2013 on account
of disputes are given below:
Particulars Financial
year to which Forum where dispute is Amount in
amount relates pending million
Custom Duty 2001-2002 ,
2004-2005 and Commissioner of appeal 28.25
2009-10
Cess 2007-2008 and
2008-2009 High Court 53.70
Sales Tax 2001-2002 to
2003-2004 Appellate Tribunal 14.98
Entry Tax 2010-2011 High Court 11.35
Income Tax 2004-2005 to
2010-2011 Commissioner of appeal 732.00
x. The Company does not have any accumulated losses as at the end of
the year and has not incurred cash losses during the fnancial year and
in the immediately preceding fnancial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
fnancial institutions or banks or to debenture holder as at the
balance-sheet date.
xii. In our opinion and 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 chit/nidhi/mutual beneft fund/ society.
Accordingly, clause 4(xiii) of the order is not applicable.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investment. Accordingly, clause 4(xiv) of the
order is not applicable.
xv. In our opinion and according to the information and explanations
given to us, the Company has given guarantee for loans taken by others
from Banks or Financial Institutions. The terms and conditions thereof
are not prima-facie prejudicial to the interest of the Company.
xvi. In our opinion and according to the information and explanations
given to us and on an overall examination, the term loans have been
applied for the purpose for which they were obtained.
xvii. On the basis of our examination of books of accounts and
information and explanations given to us, in our opinion, the funds
raised on a short term basis have not been used for long term
investment.
xviii. During the year, the Company has not made any preferential
allotment of shares to parties covered in the register maintained Under
Section 301 of the Act.
xix. The Company has created charged on debentures issued during the
year.
xx. The Company has not raised any money by public issue during the
year.
xxi. During the course of our audit carried out in accordance with the
generally acceptable auditing practices and as informed by the
Management, no fraud on or by the Company has been noticed or reported
during the year.
For Vatsaraj & co.
Chartered Accountants
FRN No. 111327W
ca mayur Kisnadwala
Mumbai Partner
May 30, 2013 Membership No.: 33994
Mar 31, 2012
We have audited the attached Balance Sheet of Patel Engineering Ltd. as
at March 31, 2012, the Statement of Profit and Loss Account and Cash
Flow Statement of the Company 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.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditors' Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, and on the basis of such checks
as we considered appropriate and according to the information and
explanations given to us, we annex hereto a statement on the matter
specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to 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 purpose 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, the Statement of Profit and Loss Account and
Cash Flow Statement of the Company dealt with by this report are in
agreement with the books of accounts of the Company;
(d) in our opinion, the Balance Sheet, the Statement of Profit and 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) on the basis of written representations received form the
Directors, as on March 31, 2012 and taken on record by the Board of
Directors, we report that none of the Director is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
(f) in our opinion and to the best of our information and according to
the explanations given to us the said accounts together with notes
thereon and attached thereto give in the prescribed manner the
information required by the Companies Act, 1956 and give a true and
fair view in conformity with the accounting principles generally
accepted in India;
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in case of the Statement of Profit and Loss account, of the Profit
of the Company for the year ended on that date; and
(iii) in the case of Cash Flow statement, of the cash flows for the
year ended on that date.
(Referred to in paragraph 1 of the Auditors' Report of the even date to
the members of Patel Engineering Ltd. on the accounts for the year
ended March 31, 2012), we report that:
i. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) We have been informed that, the fixed assets including assets of the
Company purchased in the name of Directors and their relatives and
employees have been physically verified at reasonable intervals by the
Management and no material discrepancies were noticed on such
verifications.
c) Fixed Assets disposed off during the year were not substantial and
therefore do not affect the going concern status of the Company.
ii. a) Physical verification of inventories has been conducted at
reasonable intervals by the management.
b) In our opinion and on the basis of information and explanations
given to us, 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 has maintained proper records of inventory. We have been
informed by the management, that the discrepancies between the physical
stock and book records were not material.
iii. a) The Company has granted unsecured loan at call to two companies
covered in the register maintained under section 301 of the Companies
Act, 1956 aggregating to a maximum outstanding of Rs. 264.99 million
during the year and Rs. 264.99 million outstanding at the year end.
b) In our opinion, the rate of interest and other terms & conditions
are prima facie not prejudicial to the interest of the Company.
c) The receipt of principal amounts and interest are at call.
d) There is no overdue amount in respect of the above loan.
e) The Company has taken interest free unsecured loans from a Company,
a Firm and a Director covered in the register maintained under Section
301 of the Companies Act, 1956, aggregating to a maximum outstanding of
Rs. 39.40 million during the year and Rs. nil outstanding at the year end.
f) In our opinion, other terms & conditions are prima facie not
prejudicial to the interest of the Company.
g) The principal amounts have been paid during the year.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for work executed and we have
not observed any continuing failure to correct major weakness in such
internal control system.
v. a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register required to-be maintained under that section.
b) As explained to us, the transactions made in pursuance of such
contracts or arrangements and exceeding the value of Rs. 5,00,000 in
respect of any party during the year are at a negotiated price, fixed
at reasonable levels, having regard to the technical requirements
/quality consideration and alternate source of availability. There are
no comparable transactions with the Company of similar nature.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits from public and
consequently, the directives issued by the Reserve Bank of India and
the provision of Section 58(A), 58(AA) or any other relevant provisions
of the Companies Act, 1956 and the rules framed there under are not
applicable.
vii. The internal audit function is carried out by a firm of
independent Chartered Accountants appointed by the management and is
commensurate with the size of the Company and the 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 of India,
regarding the maintenance of cost records under clause (d) of
subsection (1) of Section 209 of the Act and are of the opinion that
prima facie, the prescribed accounts and records have been maintained.
We have, however not made a detailed examination of the records with a
view to determine whether they are accurate or complete.
ix. a) As explained to us, the Company is generally regular in
depositing undisputed statutory dues, in respect of Provident Fund,
Investor Education & Protection Fund, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, cess and other material
statutory dues with the appropriate authorities.
b) According to the information and explanations given to us, details
of dues of sales tax, wealth tax, service tax, custom duty, excise duty
and cess which have not been deposited as on March 31, 2011 on account
of disputes are given below:
Particulars Financial year to
which amount relates Forum where dispute
is pending Amount in
millions
Custom Duty 2001-2002 , 2004-2005
and 2009-10 Commissioner of appeal 28.25
Cess 2007-2008 and
2008-2009 High Court 53.70
Sales Tax 2001-2002 to 2003-2004 Appellate Tribunal 14.98
x. The Company does not have any accumulated losses as at the end of
the year and has not incurred cash losses during the financial year and
in the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions or banks or to debenture holder as at the
balance-sheet date.
xii. In our opinion and 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 chit /nidhi /mutual benefit fund / society.
Accordingly, clause 4(xiii) of the order is not applicable.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly, clause 4(xiv) of the
order is not applicable.
xv. In our opinion and according to the information and explanations
given to us, the Company has given guarantee for loans taken by others
from Banks or Financial Institutions. The terms and conditions thereof
are not prima facie prejudicial to the interest of the Company.
xvi. In our opinion and according to the information and explanations
given to us and on an overall examination, the term loans have been
applied for the purpose for which they were obtained.
xvii. On the basis of our examination of books of accounts and
information and explanations given to us, in our opinion, the funds
raised on a short term basis have not been used for long term
investment.
xviii. During the year, the Company has not made any preferential
allotment of shares to parties covered in the register maintained under
Section 301 of the Act.
xix. The Company has created charges on debentures issued during the
year.
xx. The Company has not raised any money by public issue during the
year.
xxi. During the course of our audit carried out in accordance with the
generally acceptable auditing practices and as informed by the
Management, no fraud on or by the Company has been noticed or reported
during the year.
For VATSARAJ & CO.
Chartered Accountants
FRN: 111327W
CA Nitesh K Dedhia
Partner
M. No. 114893
Mumbai
September 4, 2012
Mar 31, 2011
We have audited the attached Balance Sheet of Patel Engineering Ltd as
at March 31, 2011, the Profit and Loss Account and Cash Flow Statement
of the Company 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.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditors' Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, and on the basis of such checks
as we considered appropriate and according to the information and
explanations given to us, we annex hereto a statement on the matter
specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to 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 purpose 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, the Profit and Loss Account and Cash Flow
Statement of the Company dealt with by this report are in agreement
with the books of accounts of the Company;
d. in our opinion, the Balance Sheet, the Profit and 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. on the basis of written representations received form the
Directors, as on March 31, 2011 and taken on record by the Board of
Directors, we report that none of the Director is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f. in our opinion and to the best of our information and according to
the explanations given to us the said accounts together with notes
thereon and attached thereto give in the prescribed manner the
information required by the Companies Act, 1956 and give a true and
fair view in conformity with the accounting principles generally
accepted in India;
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
ii. in case of the profit and loss account, of the profit of the
Company for the year ended on that date; and
iii. in the case of Cash Flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS' REPORT
(Referred to in paragraph 1 of the Auditors Report of the even date to
the members of Patel Engineering Ltd on the accounts for the year ended
March 31, 2011), we report that:
i. a. The Company has maintained proper records
showing full particulars, including quantitative details and situation
of fixed assets.
b. We have been informed that, the fixed assets including assets of
the Company purchased in the name of Directors and their relatives and
employees have been physically verified at reasonable intervals by the
Management and no material discrepancies were noticed on such
verifications.
c. Fixed Assets disposed off during the year were not substantial and
therefore do not affect the going concern status of the Company.
ii. a. Physical verification of inventories has been conducted at
reasonable intervals by the management.
b. In our opinion and on the basis of information and explanations
given to us, 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 has maintained proper records of inventory. We have
been informed by the management, that the discrepancies between the
physical stock and book records were not material.
iii. a. The Company has granted unsecured loan at call to two
companies covered in the register maintained under section 301 of the
Companies Act 1956, aggregating to a maximum outstanding of Rs 169.26
million during the year and Rs 169.26 million outstanding at the year
end.
b. In our opinion, the rate of interest and other terms & conditions
are prima facie not prejudicial to the interest of the Company.
c. The receipt of principal amounts and interest are at call.
d. There is no overdue amount in respect of the above loan.
e. The Company has not taken unsecured loans from Companies Firms or
Other parties covered in the register under section 301 of the Act
during the year Accordingly, clause 4(iii) (f) and (g) of the order is
not applicable.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for work executed and we have
not observed any continuing failure to correct major weakness in such
internal control system.
v. a. In our opinion and according to the
information and explanations given to us, the particulars of contracts
or arrangements referred to in section 301 of the Companies Act 1956,
have been entered in the register required to-be maintained under that
section.
b. As explained to us, the transactions made in pursuance of such
contracts or arrangements and exceeding the value of Rs 5,00,000 in
respect of any party during the year are at a negotiated price, fixed
at reasonable levels, having regard to the technical requirements/
quality consideration and alternate source of availability. There are
no comparable transactions with the Company of similar nature.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits from public and
consequently, the directives issued by the Reserve Bank of India and
the provision of section 58(A), 58(AA) or any other relevant provisions
of the Companies Act 1956 and the rules framed there under are not
applicable.
vii. The internal audit function is carried out by a firm of
independent Chartered Accountants appointed by the management and is
commensurate with the size of the Company and the nature of its
business.
viii. As explained to us the Central Government has not prescribed the
maintenance of the cost records under Section 209(l)(d) of the
Companies Act, 1956. Accordingly clause 4 (viii) is not applicable.
ix. a. As explained to us, the Company is generally regular in
depositing undisputed statutory dues, in respect of Provident Fund,
Investor Education & Protection Fund, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, cess and other material
statutory dues with the appropriate authorities.
b. According to the information and explanations given to us, details
of dues of sales tax, wealth tax, service tax, custom duty, excise duty
and cess which have not been deposited as on 31st March 2011 on account
of disputes are given below:
Particulars Financial year to
which amount relates Forum where dispute
is pending Rs in
millions
Custom Duty 2001-2002, 2004-2005
and 2009-10 Commissioner of appea l28.25
Cess 2007-2008 and 2008-2009 High Court 53.70
Sales Tax 2001-2002 to 2003-2004 Appellate Tribunal 14.98
x. The Company does not have any accumulated losses as at the end of
the year and has not incurred cash losses during the financial year and
in the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions or banks or to debenture holder as at the
balance-sheet date.
xii. In our opinion and 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 chit/nidhi/mutual benefit fund/ society.
Accordingly, clause 4(xiii) of the order is not applicable.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investment. Accordingly, clause 4(xiv) of the
order is not applicable.
xv. In our opinion and according to the information and explanations
given to us, the Company has given guarantee for loans taken by others
from Banks or Financial Institutions. The terms and conditions thereof
are not prima-facie prejudicial to the interest of the Company.
xvi. In our opinion and according to the information and explanations
given to us and on an overall examination, the term loans have been
applied for the purpose for which they were obtained.
xvii. On the basis of our examination of books of accounts and
information and explanations given to us, in our opinion, the funds
raised on a short term basis have not been used for long term
investment.
xviii. During the year, the Company has not made any preferential
allotment of shares to parties covered in the register maintained Under
Section 301 of the Act.
xix. The Company has created charged on outstanding debentures issued
during the year.
xx. The Company has not raised any money by public issue during the
year.
xxi. During the course of our audit carried out in accordance with the
generally acceptable auditing practices and as informed by the
Management, no fraud on or by the Company has been noticed or reported
during the year.
For Vatsaraj & Co.
Chartered Accountants
FRN: 111327W
CA Nitesh K Dedhia
Partner
M. No.: 114893
Mumbai
September 10, 2011
Mar 31, 2010
We have audited the attached Balance Sheet of Patel Engineering Ltd. as
at March 31, 2010, the Profit and Loss Account and Cash Flow Statement
of the Company 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 auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, and on the basis of such checks
as we considered appropriate and according to the information and
explanations given to us, we annex hereto a statement on the matter
specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to 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 purpose 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, the Profit and Loss Account and Cash Flow
Statement of the Company dealt with by this report are in agreement
with the books of accounts of the Company;
(d) in our opinion, the Balance Sheet, the Profit and 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) on the basis of written representations received from the
Directors, as on March 31, 2010 and taken on record by the Board of
Directors, we report that none of the Director is disqualified as on
March 31, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
(f) in our opinion and to the best of our information and according to
the explanations given to us the said accounts together with notes
thereon and attached thereto give in the prescribed manner the
information required by the Companies Act, 1956 and give a true and
fair view in conformity with the accounting principles generally
accepted in India;
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(ii) in case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT
(Referred to in paragraph 1 of the Auditors Report of the even date to
the members of Patel Engineering Ltd. on the accounts for the year
ended March 31, 2010), we report that:
i. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) We have been informed that, the fixed assets including assets of the
Company purchased in the name of Directors and their relatives and
employees have been physically verified at reasonable intervals by the
Management and no material discrepancies were noticed on such
verifications.
c) Fixed Assets disposed off during the year were not substantial and
therefore do not affect the going concern status of the Company.
ii. a) Physical verification of inventories has been conducted at
reasonable intervals by the management.
b) In our opinion and on the basis of information and explanations
given to us, 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 has maintained proper records of inventory. We have been
informed by the management, that the discrepancies between the physical
stock and book records were not material.
iii. a) The Company has granted unsecured loan at call to thirty two
companies covered in the register maintained under section 301 of the
Companies Act 1956, aggregating to a maximum outstanding of Rs. 2801.16
million during the year.
b) In our opinion, the rate of interest and other terms & conditions
are prima facie not prejudicial to the interest of the Company.
c) The receipt of principal amounts and interest there on is as
stipulated or called.
d) There is no overdue amount in respect of the above loan.
e) The Company has not taken unsecured loans from Companies Firms or
Other parties covered in the register under section 301 of the Act
during the year Accordingly, clause 4(iii) (f) and (g) of the order is
not applicable.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal
control systems commensurate with the size of the Company and the
nature of its business for the purchase of inventory, fixed assets and
for work executed and we have not observed any continuing failure to
correct major weakness in such internal control system
v. a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act 1956, have been entered in the
register required to-be maintained under that section.
b) As explained to us, the transactions made in pursuance of such
contracts or arrangements and exceeding the value of Rs. 5,00,000 in
respect of any party during the year are at a negotiated price, fixed
at reasonable levels, having regard to the technical
requirements/quality consideration and alternate source of
availability. There are no comparable transactions with the Company of
similar nature.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted
deposits from public and consequently, the directives issued by the
Reserve Bank of India and the provision of section 58(A), 58(AA) or any
other relevant provisions of the Companies Act 1956 and the rules
framed there under are not applicable.
vii. The internal audit function is carried out by a firm of
independent Chartered Accountants appointed by the
management and is commensurate with the size of the Company and the
nature of its business.
viii. 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. Accordingly clause 4
(viii) is not applicable.
ix. a) As explained to us, the Company is regular in depositing
undisputed statutory dues, in respect of Provident Fund, Investor
Education & Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, cess and other material statutory dues
with the appropriate authorities.
b) According to the information and explanations given to us, details
of dues of sales tax, wealth tax, service tax, custom duty, excise duty
and cess which have not been deposited as on 31st March 2010 on account
of disputes are given below:
Particulars Financial year
to which Forum where Amount
amount relates dispute is
pending (Rs. in
million)
Custom Duty 2001-2002,2004-2005 Commissioner of
appeal 28.25
and 2009-10
Cess 2007-2008 and 2008-2009 High Court 53.70
Sales Tax 2001-2002 to 2004-2005 Appellate
Tribunal 9.66
x. The Company does not have any accumulated losses as at the end of
the year and has not incurred cash losses during the financial year and
in the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions or banks or to debenture holder as at the
balance-sheet date.
xii. In our opinion and 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 chit/nidhi/mutual benefit fund/society.
Accordingly, clause 4(xiii) of the order is not applicable.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investment. Accordingly, clause 4(xiv) of the
order is not applicable.
xv. In our opinion and according to the information and explanations
given to us, the Company has given guarantee for loans taken by others
from Banks or Financial Institutions. The terms and conditions thereof
are not prima-facie prejudicial to the interest of the Company.
xvi. In our opinion and according to the information and explanations
given to us and on an overall examination, the term loans have been
applied for the purpose for which they were obtained.
xvii. On the basis of our examination of books of accounts and
information and explanations given to us, in our opinion, the funds
raised on a short term basis have not been used for long term
investment.
xviii. During the year, the Company has not made any preferential
allotment of shares to parties covered in the register maintained Under
Section 301 of the Act.
xix. The Company has created charged on outstanding debentures issued
during the year.
xx. The Company has not raised any money by public issue during the
year.
xxi. During the course of our audit carried out in accordance with the
generally acceptable auditing practices and as informed by the
Management, no fraud on or by the Company has been noticed or reported
during the year.
For Vatsaraj & Co.
Chartered Accountants
July 8, 2010 CA Mayur Kisnadwala
Mumbai Partner
M. No.33994
FRN: 111327W
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