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P B A Infrastructure Ltd.

BSE: 532676 Sector: Infrastructure
NSE: PBAINFRA ISIN Code: INE160H01019
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VOLUME 12643
52-Week high 31.55
52-Week low 15.25
P/E
Mkt Cap.(Rs cr) 23
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 15.50
CLOSE 16.85
VOLUME 12643
52-Week high 31.55
52-Week low 15.25
P/E
Mkt Cap.(Rs cr) 23
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

P B A Infrastructure Ltd. (PBAINFRA) - Auditors Report

Company auditors report

To the Members of

M/s. PBA Infrastructure Limited

CIN : L45200MH1974PLC017653

611/3V.N.Purav Marg

Chembur(East) Mumbai

Maharashtra - 400071.

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of M/s. PBAInfrastructure Limited (‘the Company') which comprise the balance sheet as at 31March 2016 the statement of profit and loss and the cash flow statement for the year thenended and a summary of 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement 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 accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

a) No provision has been made against performance bank guarantees invoked totalamounting to ' 26.85 Crores against the company and disputed by it.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us and further to our comments in the ‘Annexure-A' we state that exceptfor possible effect of the matter described in sub para (a) 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 31st March 2016 and its loss and its cash flowsfor the year ended on that date .

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the ‘Annexure-A' a statement on the matters specified in theparagraph 3 and 4 of the Order to the extent applicable.

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 bestof our knowledge and belief were necessary for the purposes of our audit of the aforesaidstandalone financial statements.

(b) in our opinion proper books of account as required by law have been kept by theCompany 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 statementdealt with by this Report are in agreement with the books of account;

(d) except for the possible effect of the matter described in sub para ‘a' in the‘Basis for Qualified Opinion' paragraph above in our opinion the aforesaidstandalone financial statements comply with the Accounting Standards specified underSection 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 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act; and

(f) 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-B".

(g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note No. C-2 C-3 and C-11 to the financialstatements;

ii. the Company did not have any Long term contract including derivatives contract assuch the question of commenting on any material foreseeable losses thereon does not arise.

iii. There has been no delay in transferring amount required to be transferred to theInvestor Education and Protection fund by the Company.

For Ajay B Garg
Chartered Accountant
A Garg
Proprietor
Mem No: 032538
Place : Mumbai
Dated : 30th May 2016

'Annexure - A' to the Independent Auditors' Report of M/s. PBA Infrastructure Limited

Referred to in paragraph 1 under the heading ‘Report on Other Legal &Regulatory Requirement' of our report of even date to the standalone financial statementsof the Company for the year ended March 31 2016 we report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of two years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the company.

(ii) (a) As explained to us the inventories have been physically verified during theyear by the management. In our opinion having regard to the nature and location ofstocks the frequency of the physical verification is reasonable.

(b) In our opinion the discrepancies noticed on physical verification of the inventorywere not material in relation to the operations of the Company and the same have beenproperly dealt with in the books of account.

(iii) The Company has not granted loans to any bodies corporate covered in the registermaintained under section 189 of the Companies Act 2013 (‘the Act') Hence we havenot commented upon the paragraph 3(iii) of the Order.

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in respect of loans investments guarantees and security.

(v) The Company has accepted deposits from the public. The Company has generallycomplied with the provisions of directives issued by Reserve Bank of India and theprovisions of Section 73 to 76 of the Companies Act 2013 and rules framed there underexcept filling of Return of Deposit with Registrar of Companies and default in payment ofInterest and principal repayment on maturity. As per the information and explanation givento us no order under the aforesaid sections have been passed by the Company Law BoardNational Company Law Tribunal or Reserve Bank of India or any Court or any othertribunal on the company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the Companies (Cost records and audit) Rules 2014 and as prescribed by the CentralGovernment under section 148(1) of the Act and are of the opinion that prima-facie theprescribed accounts and cost records have been made and maintained by the Company. We havenot however made a detailed examination of the cost records with a view to determiningwhether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax duty of excise service tax duty of customs employees' stateinsurance value added tax cess and other material statutory dues have been regularlydeposited with few delay in some cases during the year by the Company with the appropriateauthorities.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax wealth tax service tax dutyof excise duty of customs value added tax cess and other material statutory dues werein arrears as at 31 March 2016 for a period of more than six months from the date theybecame payable except followings:

Particualrs Amount
TDS 455.96
PF 15.84
Service Tax 6.07
Profession Tax 1.32

(c) According to the information and explanations given to us there are no materialdues of wealth tax duty of customs and cess which have not been deposited with theappropriate authorities on account of any dispute. However according to information andexplanations given to us the following dues of income tax sales tax service tax andvalue added tax have not been deposited by the Company on account of disputes:

Name of the Statute Nature of dues Amount(in Lakhs) Forum where dispute is pending
MVAT Act Sales Tax/Vat 2336.52 Appellate Authority VAT Mumbai
Rajasthan Entry Tax Act Entry Tax 352.00 Appellate Authority -RST
Income Tax Income Tax 653.00 CIT (A)Mumbai
Income Tax Income Tax Penalty 935.01 ITAT Mumbai

(viii)Based on our Audit procedures and according to information and explanation givento us the Company has irregular in payment of banks dues. The Company has overdueoutstanding dues to financial institutions banks as at 31st March 2016 asfollows:

I. Long Term Borrowing

Name of Bank Default Principal Amount Default Interest Amount Total Default Amount Continuing Default Period
1 Royal Bank of Scotland 925396 44604 970000 Sept-12 to March-16
2 Srei Equipment Finance Ltd 93567279 7775135 101342414 April to March 16
3 Tata Capital Ltd-Tata Hitachi 232499 1401 233900 Since March 14
4 ICICI Bank -Mesto Inida 7554318 209511 7763829 Since Feb-14
5 Shriram Equipment Finance Ltd 19734608 2164785 21899393 Since Jan-14
6 Canara Bank -LTL-1(CDR) 174000000 72498401 246498401 Since April 13
7 Canara Bank -LTL-II (CDR) 193200000 124101159 317301159 Since April 13
8 Canara Bank FITL 43537513 9957434 53494947 Since April 13
9 Union Bank -LTL-I (CDR) 48297859 14225478 62523337 Since Oct-13
10 Union Bank - LTL-II (CDR 7198641 2506617 9705258 Since July13
11 Union Bank -FITL-I 3916487 530309 4446796 Since March14
12 Union Bank - FITL-II 618301 80353 698654 Since April 14
13 State Bank of Patiala-CDR 35323895 9360000 44683895 Since June14
14 State Bank of Patiala -FITL 2562450 726000 3288450 Since June14
15 Karur Vysya Bank-CDR 51054386 9872101 60926487 Since Oct14
16 Karur Vysya Bank -FITL 3051244 453494 3504738 Since Dec-14

II. Short Term Borrowing

Name of Bank Period Amount of Default
1 IDBI Bank Ltd Since Feb 2013 65000200
2 Canara Bank -CC Since June 2013 683053524
3 Canara Bank-DD Since April 2013 152419065
4 Canara Bank-BG Invoked Since July 2013 625738131
5 Union Bank of India-CC Since Jan 2014 108568108
6 Union Bank of India -OD Since March 2014 56962940
7 Union Bank of India-BG Invoked Since March 2014 113417176
8 State Bank of Patiala-CC Since Jan 2014 134930062
9 Karur Vysya Bank-CC Since Nov2014 103274265
10 Punjab & Sind Bank -CC Since Sept 2015 152814261

(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments. The term loans have been applied forthe purpose for which they were obtained.

(x) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.

(xi) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.

(xii) I n our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

(xiii) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

(xiv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

(xv) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.

For Ajay B Garg
Chartered Accountant
A Garg
Mem No: 032538
Place : Mumbai
Dated : 30th May 2016

'Annexure - B' to the Independent Auditor's Report of M/s. PBA Infrastructure Limited

[Referred to in paragraph 2(f) under the heading ‘Report on Other Legal &Regulatory Requirement' of our report of even date to the standalone financial statementsof the Company for the year ended March 31 2016.]

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 M/s. PBAInfrastructure Limited (‘the Company') as of 31 March 2016 in conjunction with ouraudit 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 (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' 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 issued by ICAI and deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our 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 judgment 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 audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Ajay B Garg
Chartered Accountant
A Garg
Mem No: 032538
Place : Mumbai
Dated : 30th May 2016