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Perfect Infraengineers Ltd.

BSE: 532595 Sector: Engineering
NSE: PERFECT ISIN Code: INE925S01012
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Perfect Infraengineers Ltd. (PERFECT) - Auditors Report

Company auditors report

To

THE MEMBERS OF PERFECT INFRAENGINEERS LTD

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of PERFECTINFRAENGINEERS LTD ("the Company") which comprise the Balance Sheet as at31 March 2016 the Statement of Profit and Loss 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 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 with theaccounting principles generally accepted in India (Indian GAAPs) including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 as applicable.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 Company's Directors as well as evaluating the overall presentation ofthe financial statements.

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

Basis of qualified opinion

The Company has provided gratuity liability on the basis of arithmetical basis insteadof actuarial valuation basis which constitutes a departure from the Accounting Standard-AS15 "Employee Benefits". Since the actuarial valuation of gratuity is notavailable impact of the same on standalone financial results could not be ascertained.

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 Basis of qualifiedopinion above the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India;

a) in the case of the Balance Sheet of the state of affairs of the Company as at March31 2016;

b) in the case of the Statement of Profit and Loss of the Profit for the year ended onthat date; and

c) in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order2016 ("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 inthe paragraphs 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.

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) In our opinion except for the possible effects of the matter described in Basis ofqualified opinion above the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31March 2016 and 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 as applicable.

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 ouropinion and to the best of our information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note No.30 to the financialstatements ;

ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Godbole Bhave & Co.
Chartered Accountants FRN 114445W
Arvind Mahajan
Place: Mumbai Partner
Date: 19.05.2016 Membership No. :100483

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 under the heading "Report on Other Legal and RegulatoryRequirements" of our report of even date to the members of PERFECT INFRAENGINEERS LTDon the standalone financial statements for the year ended March 312016.

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

(b) As explained to us the Company has a phased program of physical verification ofthe fixed assets which in our opinion is reasonable having regard to the size of theCompany and nature of its assets. During the year the Company in accordance with the saidprogram has physically verified certain fixed assets. No material discrepancies werenoticed on such physical verification.

(c) According to the information and explanations given to us and based on the recordsproduced the title deeds of the immovable properties are held in the name of the Company.

(ii) The inventories have been physically verified during the year by the management.In our opinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material and samehave been properly dealt with.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. Accordingly clause (iii) of Paragraph 3 of the Order is not applicable to theCompany.

(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 Act in respect ofinvestments made. According to the information and explanations given to us the Companyhas not provided any guarantee/security nor has given any loans.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from public therefore; the provisions of clause (v) of Paragraph 3of the Order are not applicable to the Company.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under section 148 (1) of the Act inrespect of business activities carried on by the Company. Therefore the provisions ofclause (vi) of Paragraph 3 of the Order are not applicable to the Company..

(vii) (a) On the basis of examination of the relevant records and according to theinformation and explanations given to us we are of the opinion that the Company isgenerally regular in depositing with the appropriate authorities undisputed statutory duesincluding Provident Fund Employees' State insurance Income-tax Sales Tax Service TaxValue Added Tax Duty of Customs Duty of Excise Cess and other applicable statutorydues.

On the basis of examination of the relevant records and according to the informationand explanations given to us except for Sales Tax / Vat of Rs. 622655/- no undisputedamounts payable in respect of Provident Fund Employees' State insurance Income-taxService Tax Duty of Customs Duty of Excise Cess and other applicable statutory dueswere outstanding as at 31st March 2016 for a period of more than six months from the datethey became payable.

(b) On the basis of the books of accounts and records of the Company as produced andexamined by us except for disputed Value Added Tax dues as detailed below there are nodues of Income Tax sales Tax Service Tax Duty of customs and Duty of excise which havenot been deposited on account of any dispute.

Name of the Statute Nature of Dues Amount Year to which the amount relates Forum where dispute is pending
Karnataka VAT Act VAT 531378/- 2011-12 JT. Comm. Of Commercial taxes( Appeals) - 4 Bangalore
Maharashtra VAT Act VAT 712688/- 2008-09 Dy. Commissioner of Sales Tax (Appeals)Thane
Maharashtra VAT Act VAT 43815/- 2011-12 Dy. Commissioner of Sales Tax (Appeals)Thane

Out of the above disputed value added tax dues an amount of Rs. 204478/- has beenpaid by the Company under protest and has also furnished a bank guarantee of Rs.371900/-in one of the case.

(viii) On the basis of our examination of the records of the Company and according tothe information and explanations given to us the Company has defaulted in repayment ofborrowings repayable on demand to bank. The Company has not availed any loans orborrowings from government or debenture holders. The lender wise details of the amount ofdefault and the period of default are as under.

Sr. No. Name of The Lenders Nature of Dues Amount of Default as at 31st March 2016 Period of Default
1 Axis Bank Overdue Amount of Loan repayable on demand Rs 3484711/- Mar-16

(ix) According to the information and explanations given to us and on the basis ofexamination of records the money raised by the Company by way of initial public offer andterm loans during the year were applied for the purposes for which those are raised. TheCompany has not raised any money by way of further public offer (including debtinstruments) during the year.

(x) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and on the basis of information and explanationsgiven by the management no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and on the basis ofexamination of records the managerial remuneration paid/provided during the year is inaccordance with provisions of section 197 read with schedule V of the Act.

(xii) According to the information and explanations given to us and in our opinion theCompany is not a Nidhi Company and accordingly the provisions of clause (xii) of Paragraph3 of the Order are not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of records of the Company the transactions entered with related parties arein compliance with provisions of section 177 and 188 of the Act where applicable and thedetails of such transactions are disclosed in the Standalone Financial Statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company during the year has made privateplacement of shares complying with the provisions of section 42 of the Act and hasutilised the said money for the purposes for which the funds were raised. The Companyduring the year has neither made any preferential allotment of shares nor issued fully orpartly convertible debentures.

(xv) In our opinion and according to the information and explanations given to us andbased on our examination of records of the Company the Company during the year has notentered into any non cash transactions with directors or persons connected with thedirectors and accordingly the provisions of clause (xv) of Paragraph 3 of the Order arenot applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For Godbole Bhave & Co.
Chartered Accountants
FRN 114445W
Arvind Mahajan
Place: Mumbai Partner
Date: 19.05.2016 Membership No. :100483

Annexure - B to the independent auditor's report of even date on the financialstatements of Perfect Infraengineers Limited

Referred to in paragraph 2(f) under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of PERFECTINFRAENGINEERS LTD on the standalone financial statements for the year ended March312016.

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 PerfectInfraengineers Limited ("the Company") as of 31st March 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

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 Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India('ICAI'). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information 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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 31st 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 issued by ICAI.

For Godbole Bhave & Co.
Chartered Accountants
FRN 114445W
Arvind Mahajan
Place: Mumbai Partner
Date: 19.05.2016 Membership No. :100483