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GPT Infraprojects Ltd.

BSE: 533761 Sector: Infrastructure
NSE: GPTINFRA ISIN Code: INE390G01014
BSE LIVE 15:45 | 21 Aug 141.50 -5.90
(-4.00%)
OPEN

146.00

HIGH

152.35

LOW

141.00

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 146.00
PREVIOUS CLOSE 147.40
VOLUME 44472
52-Week high 176.40
52-Week low 96.03
P/E 40.20
Mkt Cap.(Rs cr) 412
Buy Price 0.00
Buy Qty 0.00
Sell Price 141.50
Sell Qty 208.00
OPEN 146.00
CLOSE 147.40
VOLUME 44472
52-Week high 176.40
52-Week low 96.03
P/E 40.20
Mkt Cap.(Rs cr) 412
Buy Price 0.00
Buy Qty 0.00
Sell Price 141.50
Sell Qty 208.00

GPT Infraprojects Ltd. (GPTINFRA) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR’S REPORT

To

The Members of GPT Infraprojects Limited

Report on the Financial Statements

We have audited the accompanying standalone financial statements of GPTInfraprojects Limited ("the Company") which comprise the Balance Sheet asat March 31 2016 the Statement of Profit and Loss and Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation in which are incorporated the returns for the year ended on that date auditedby the branch auditors of the Company’s branch at Mozambique.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance withaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our qualified auditopinion.

Basis for qualified opinion

Attention is invited to note 27(C) to the standalone financial statements regardingunbilled revenue accrued price escalations and trade receivables all classified bymanagement as current on certain significantly completed construction contractsaggregating RS. 3530.33 lacs which are yet to be billed / realised by the Companyand that are largely outstanding for more than 3 years. Due to the uncertainties over theeventual billings / collections of the said amounts we are unable to comment on theappropriateness or otherwise of the aforesaid balances being carried forward or theirclassification as current in these standalone financial statements including the extent ofrecoverability of the above asset balances the period over which these are expected to berecovered and any other consequential impact that may arise in this regard.

Qualified opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2016 of its profit and its cash flows for the yearended on that date.

Emphasis of Matter

Without qualifying our opinion attention is drawn to note no. 27(B) of the standalonefinancial statements regarding discontinuation of execution of an EPC contract by theCompany (such contract was received from its subsidiary) pursuant to the termination of aconcession agreement between the subsidiary and its customer and the uncertainty onrecoverability of net assets aggregating RS. 1922.06 lacs as at March 31 2016.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure 1" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act we report that:

(a) We have sought and except for the matter described in the Basis for QualifiedOpinion paragraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

(b) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph in our opinion proper books of account as required by law have beenkept by the Company so far as appears from our examination of those books and properreturns adequate for the purposes of our audit have been received from the branch notvisited by us;

(c) The report on the accounts of the foreign project site of the Company audited undersection 143 (8) of the Act by the branch auditor has been sent to us and have beenproperly dealt by us in preparing this report;

(Rs. ) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account and with the returnsreceived from the branch not visited by us;

(e) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph in our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014;

(f) The matter described in the Basis for Qualified Opinion paragraph and Emphasis ofMatter paragraph in our opinion may have an adverse effect on the functioning of theCompany;

(g) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of section 164 (2) ofthe Companies Act 2013;

(h) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(i) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report; (j) With respect to the othermatters to be included in the Auditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: i. The Company has disclosedthe impact of pending litigations on its financial position in its financial statements– Refer Note 27(A) and 27(B) to the financial statements; ii. The Company has madeprovision as required under the applicable law or accounting standards for materialforeseeable losses if any on long-term contracts including derivative contracts; iii.There were no amounts which were required to be transferred to the Investor Education andProtection Fund by the Company.

Other Matters

1. We did not audit financial statements of the Company’s joint ventures whosefinancial statements reflect the Company’s share of RS. 119.03 lacs in the net lossof the joint ventures for the year ended March 31 2016. Those financial statements andother financial information have been audited by other auditors whose report has beenfurnished to us. Our opinion in so far as it relates to the share of loss of the jointventures is based solely on the reports of other auditors. Our opinion is not qualifiedin respect of this matter.

2. The accompanying standalone financial statements include total assets of RS. 560.17lacs as at March 31 2016 and loss before tax of RS. 326.82 lacs for the year ended onthat date in respect of a foreign project site which has been audited by the branchauditor which financial statements other financial information and auditor’sreports have been furnished to us. Our opinion in so far as it relates to amounts anddisclosures included in respect of this foreign project site is based solely on the reportof such branch auditors. Our opinion is not qualified in respect of this matter.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E / E300005

per Bhaswar Sarkar
Place of Signature: Kolkata Partner
Date: May 25 2016 Membership Number: 55596

Annexure 1 referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of GPTInfraprojects Limited as at and for the year ended March 31 2016

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in fixed assets are held in the name of theCompany.

(ii) (a) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii) (a) The Company has granted loans to two companies covered in the registermaintained under section 189 of the Companies Act 2013. In our opinion and according tothe information and explanations given to us the terms and conditions of the loans werenot prejudicial to the Company’s interest.

(b) The above loans and interest thereon were repayable on demand. As informed theloans were fully received as and when demanded and thus there was no default on part ofthe borrowers. We have been informed that borrowers were regular in payment of interest onsuch loans.

(c) The loans granted as mentioned above have been fully repaid as on the balancesheet date and as such there are no amounts of loans granted to companies firms or otherparties listed in the register maintained under section 189 of the Companies Act 2013outstanding for more than ninety days as at the balance sheet date. (iv) In our opinionand according to the information and explanations given to us provisions of section 185and 186 of the Companies Act 2013 in respect of loans to directors including entities inwhich they are interested and in respect of loans and advances given investments madeand guarantees and securities given have been complied with by the Company.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 and are of the opinion that prima facie thespecified accounts and records have been made and maintained. We have not however made adetailed examination of the same. (vii) (a) Undisputed statutory dues in respect of salestax wealth tax customs duty and value added tax have generally been regularly depositedwith appropriate authorities. However such dues in respect of provident fundemployees’ state insurance income-tax service tax excise duty and other materialstatutory dues have not been regularly deposited with appropriate authorities and therehave been serious delays in large number of cases.

(b) According to the information and explanations given to us undisputed dues inrespect of provident fund employees’ state insurance income-tax service tax salestax custom duty excise duty value added tax cess and other material statutory dueswhich were outstanding at the year end for a period of more than six months from thedate they became payable are as follows:

Name of the Statute Nature of Dues Amount (Rs. in lacs) Period to which the amount relates Due date Date of Payment
Income Tax Act 1961 Income tax deducted at source 23.89 February ‘15- August ‘15 March ‘15 - September ‘15 Not yet paid
Income Tax Act 1961 Dividend Distribution Tax 24.72 February ‘15 February ‘15 Not yet paid
Income Tax Act 1961 Income tax collected at source 0.69 January ‘14 - July ‘15 February ‘14 - August ‘15 Not yet paid
Finance Act 1994 Service Tax 5.41 May ‘14 - August ‘15 June'14 - September'15 Not yet paid

(c) According to the records of the Company the dues outstanding in respect ofincome-tax sales-tax service tax duty on custom duty of excise and value added tax onaccount of any dispute are as follows:

Name of the Statute Nature of Dues Amount (Rs. in lacs) Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 MODVAT Credit disallowed for subsequent endorsement of third party invoice in favour of the Company 92.16 1991-92 Commissioner of Central Excise (Appeal) Kolkata
Central Excise Act 1944 Disallowance of Input Credit on Consumption of Welding Electrodes from FY 2008-09 to 2013-14 3.19 2008-09 Commissioner of Central
2009-10 Excise (Appeal) Kolkata
2010-11
2011-12
2012-13
2013-14
West Bengal Value Various Disallowances of Labour Supervision 874.35 2009-10 West Bengal Appellate
Added Tax Act 2003 charges payments to subcontractors works 2010-11 Forum Kolkata and West
contract tax etc. from Taxable Contractual 2011-12 Bengal Commercial Taxes
Transfer Price export sales and part 2012-13 Appellate & Revisional
disallowance of input tax credit Board Kolkata
Central Sales Tax Act Central sale tax levied on reimbursement of 4.35 2011-12 West Bengal Commercial
1956 inspection and freight charges and on pending Taxes Appellate & Revisional
C forms Board Kolkata
Central Sales Tax Act Central Sales tax levied on stock transfer to 47.70 2012-13 West Bengal Appellate
1956 branch at Arunachal Pradesh Forum Kolkata
Central Excise Act Excise duty levied on excess consumption of 0.41 2006-07 Commissioner of Central
1944 SGCI inserts Excise (Appeal) Kolkata
Finance Act 1994 Service tax levied on Goods Transport Agency 0.72 2008-09 Commissioner of Central
services Excise (Appeal) Kolkata

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of dues to banks. The Company didnot have any outstanding debentures or dues in respect of a financial institution or togovernment during the year. (ix) In our opinion and according to the information andexplanations given by the management the Company has utilised the monies raised by way ofterm loans for the purpose for which they were raised. The Company has not raised anymoney by way of initial public offer / further public offer / debt instruments.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no material fraud onthe Company by the officers and employees of the Company has been noticed or reportedduring the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act

2013 where applicable and the details have been disclosed in the notes to the financialstatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons or personsconnected with him as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E / E300005

per Bhaswar Sarkar
Place of Signature: Kolkata Partner
Date: May 25 2016 Membership Number: 55596

Annexure 2 to the Independent Auditor’s Report of even date on the StandaloneFinancial Statements of GPT Infraprojects Limted

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GPTInfraprojects Limited ("the Company") as of March 31 2016 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

An audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the internal financial controls overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified in the Company’s internalfinancial controls over financial reporting as at March 31 2016: a) The Company’sinternal financial controls for evaluation of recoverability of unbilled revenue accruedprice escalations and trade receivables on significantly completed construction contractswere not operating effectively as on March 31 2016 which could potentially result in theCompany not recognising appropriate provision in the financial statements in respect ofreceivables that are doubtful of recovery. b) The Company’s internal financialcontrols for classification of unbilled revenue accrued price escalations and tradereceivables on significantly completed construction contracts as current were notoperating effectively as on March 31 2016 which could potentially result in the Companynot appropriately classifying the above receivables as non-current.

A ‘material weakness’ is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company’s annual or interim financialstatements will not be prevented or detected on a timely basis. In our opinion theCompany has in all material respects maintained adequate internal financial controlsover financial reporting as of March 31 2016 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia and except for the possible effects of the material weaknesses described above onthe achievement of the objectives of the control criteria the Company’s internalfinancial controls over financial reporting were operating effectively as of March 312016.

Explanatory paragraph

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the standalone financial statements of GPT Infraprojects Limited which comprise theBalance Sheet as at March 31 2016 and the related Statement of Profit and Loss and CashFlow Statement for the year then ended and a summary of significant accounting policiesand other explanatory information. This material weakness was considered in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2016standalone financial statements of GPT Infraprojects Limited and this report does notaffect our report dated May 25 2016 which expressed a qualified opinion on thosefinancial statements.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E / E300005

per Bhaswar Sarkar
Place of Signature: Kolkata Partner
Date: May 25 2016 Membership Number: 55596