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A B Infrabuild Ltd.

BSE: 535343 Sector: Infrastructure
NSE: ABINFRA ISIN Code: INE00YB01017
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A B Infrabuild Ltd. (ABINFRA) - Auditors Report

Company auditors report

TO THE MEMBERS OF AB INFRABUILD LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of A B InfrabuildLimited ("the Company") which comprises the Balance Sheet as at 3184March 2021 the Statement of Profit and Loss (including the statement of othercomprehensive income) the statement of changes in equity and the statement of cash flowsfor the year then ended on the date and notes to the financial statements including asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ('the Act') in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2021 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements for the financial yearended 3184 March 2021. These matters were addressed in the context of our auditof the financial statements as a whole and in forming our opinion thereon and we do notprovide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

We have fulfilled the responsibilities described in the Auditor'sresponsibilities for the audit of the financial statements section of our reportincluding in relation to these matters. Accordingly our audit included the performance ofprocedures designed to respond to our assessment of the risks of material misstatement ofthe financial statements. The results of our audit procedures including the proceduresperformed to address the matters below provide the basis for our opinion on theaccompanying financial statements.

Sr Key Audit Matters Principal Audit Procedures
1. Adoption of IND AS 115 - Revenue from Contracts with Customers The procedures performed included the following:
The company has adopted the IND AS 115- Revenue from contracts with customers mandatory for reporting periods beginning on or after 1st April 2018. • We have read the accounting policy for revenue recognition and assessed the compliance of the policy in terms of the principal enunciated under IND AS 115.
Application of IND AS 115 including selection of transition method involves significant judgment in determining when control of goods or services underlying the performance obligation is transferred to the customer and transition method to be applied. • We obtained and understood the revenue recognition process including determining the point of transfer of control and completion of performance obligation.
• We performed the test of details on a sample basis and examined the underlying customer contracts.
As the revenue recognition due to the significance of the balance to the financial statements as a whole we regard this as a key audit matter. • We examined the disclosure made by management in compliance with the requirements with IND AS 115.
2. Measurement of contract assets in respect of overdue milestones and receivables. The procedures performed included the following:
The Company in its contract with customers promises to transfer distinct services to its customers which may be rendered in the form of engineering procurement and construction (EPC) services through design-build contracts and other forms of construction contracts. The recognition of revenue is based on contractual terms which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting date revenue is accrued for costs incurred against work performed that may not have been invoiced. • obtained an understanding of the Company's processes in collating the evidence supporting execution of work for each disaggregated type of revenue;
• obtained an understanding of the Company's processes in assessing the recoverability of amounts overdue and process overestimating the expected credit loss allowance;
• tested the design and operating effectiveness of the key controls over the completeness and accuracy of the key inputs and assumptions into the provisioning model;
Identifying whether the Company's performance has resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date.
• evaluated controls over authorisation and calculation of provisioning model;
• verified for the sample selected receipts post balance sheet date upto the approval of the financial statements by the Board of Directors;
Assessing the recoverability of contract assets related to overdue milestones and receivables which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment.
• performed an overall assessment of the expected credit loss provision to determine if they were reasonable considering the Company's portfolio risk profile credit risk management practices and the macroeconomic environment; and
• tested the appropriateness of the disclosures in the financial statements to ensure compliance with Ind AS 115.
3. Physical verification of inventory The procedures performed included the following:
The Company's management conducts physical verification of inventories during the year at reasonable intervals however on account of the COVID-19 related lockdown restrictions management was able to perform year end physical verification of inventories only at certain locations. Management has carried out other procedures to validate the existence of its inventory as at the year-end such as carrying out consumption analysis and performing roll-back procedures from the subsequent year end physical verification date to determine the quantities of the inventory at the balance sheet date. • Understood the process and tested the management's internal controls to establish the existence of inventory in relation to the process of periodic physical verification carried out by the management the scope and coverage of the periodic verification programme the results of such verification including analysis of discrepancies if any.
• Inspected for samples selected supporting documentation relating to purchases and consumption and such other evidences where applicable.
• Tested the analytical reviews performed by the Company such as consumption analysis.

Information other than the Financial Statements and Auditor'sReport thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the management discussion & analysis anddirector's report included in the annual report but does not include the financialstatements and our auditor's report thereon. The above information is expected to bemade available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the above other information if we conclude that there isa material misstatement therein we are required to communicate the matter to thosecharged with governance.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation and presentation ofthe financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards prescribed under Section 133 of the Actread with relevant rules issued there under. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the 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.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing thecompany's financial reporting process. Auditor's Responsibility for the Audit ofthe Financial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial results whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by Board of Directors.

• Conclude on the appropriateness of the Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial results or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial results including the disclosures and whether the financial results representthe underlying transactions and events in a manner that achieves fair presentation.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act we report that:

(a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of our auditof the aforesaid financial statements;

(b) in our opinion proper books of account as required by law have beenkept 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 othercomprehensive income statement of changes in equity and the statement of cash flows dealtwith by this Report are in agreement with the books of account;

(d) in our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 13 3 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) on the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors noneof the directors is disqualified as on 31st March 2021 from being appointed asa director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting;

(g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended in our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act;

(h) with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

(i) the Company has pending litigations and disclosure in relation tothe same has been made in the financial statement;

(ii) the Company does not see any foreseeable losses on long-termcontracts as on the balance sheet date and the Company has not entered into any derivativecontracts therefore no provision has been made in relation to the same;

(iii) the Company has not declared any dividends either in the currentyear or during any of the previous years and therefore transferring of the amounts in theInvestor Education and Protection Fund by the Company does not arise.

2. 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 of the Act we give in the Annexure "B" a statement on thematters specified in the paragraph 3 and 4 of the Order.

For BHUWANIA & AGRAWAL ASSOCIATES
(Chartered Accountants)
(Firm Registration no. 101483W)
Shubham Bhuwania
(Partner)
Membership No: 171789
UDIN : 21171789AAAAES7729
Date : 29th June 2021
Place : Mumbai

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal andRegulatory Requirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of A B Infrabuild Limited ("the Company") as of 31st March2021 in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us 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 2021based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For BHUWANIA & AGRAWAL ASSOCIATES
(Chartered Accountants)
(Firm Registration no. 101483W)
Shubham Bhuwania
(Partner)
Membership No: 171789
UDIN : 21171789AAAAES7729
Date : 29th June 2021
Place : Mumbai

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal andRegulatory Requirements' of our report of even date)

Report on the statement on the matters specified in the paragraph 3 and4 of the Companies (Auditor's Report) Order 2016:

(i) (a) The Company has maintained proper records showing Mlparticulars including quantitative details and situation of fixed assets.

(b) The Company has a programme of physical verification of its fixedassets by which fixed assets are verified. In accordance with this programme fixed assetswere verified during the year and no mate rial discrepancies were noticed on suchverification. In our opinion the periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

(ii) As per the information furnished the inventories have beenphysically verified during the year by the management. In our opinion having regard tothe nature and location of stocks the frequency of the physical verification isreasonable and no such major discrepancies found during verification of inventories.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms or otherparties covered in the register maintained under section 189 of the Companies Act andthus paragraph 3(iii) of the Order is not applicable to the company for the year underreview.

(iv) According to the information and explanations given to us theCompany had not granted any loans or provided any guarantees under Sec 185 and neither hadany investments during the year and therefore compliance in respect to provisions ofSection 185 and 186 of the Companies Act 2013 may not be applicable to the company forthe year under review.

(v) The Company did not accept any deposits during the year andtherefore compliance with the directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act2013 and the rules framed thereunder may not be applicable to the Company.

(vi) The Central Government has not prescribed maintenance of the costrecords under section 148 of the Companies Act 2013 in respect of activity of thecompany. Therefore the provision of clause (vi) of paragraph 3 (iii) of the Order is notapplicable to the company for the year under review.

(vii) a) According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has been foundto be regular in depositing undisputed statutory dues such as provident fund ESIC incometax custom duty GST cess and other statutory dues as applicable except in case ofInterest on TDS amounting to Rs.6.23 Lakhs and VAT of Rs. 24.91 Lakhs which is outstandingfor a period of more than six months from the date they became payable.

b) According to the records of the Company and information andexplanations given to us there are no dues of income tax customs duty GST and cess whichhas not been deposited on account of disputes except for the dues of Sales Tax which havenot been deposited on 31st March 2021 on account of dispute and detail is asfollows:

Name of Statue Nature of dues Amount Period to which the amount relates Forum where dispute is pending
The Maharashtra Value Added T ax Act 2002 Sales Tax Rs. 50.27 Lakhs F.Y 2014-15 Joint Commissioner of Sales tax.
The Maharashtra Value Added Tax Act 2002 Sales Tax Rs. 253.24 Lakhs F.Y 2015-16 Joint Commissioner of Sales tax.
The Maharashtra Value Added T ax Act 2002 Sales Tax Rs. 246.88 Lakhs F.Y 2016-17 Joint Commissioner of Sales tax.

(viii) As per the information and explanations given to us and based onour audit the Company has not defaulted in repayment of loans or borrowings to financialinstitutions banks and government and dues to debenture holders.

(ix) The Company has not raised any money by way of initial publicoffer or by further public offer (including debt instruments). Further in our opinion andaccording to the information and the explanations given to us the term loans availed bythe Company were prima facie applied by the Company during the year for the purposes forwhich the loans were obtained.

(x) According to the information and explanations given to us nomaterial fraud by or on the Company by its officers or employees has been noticed orreported during the course of our audit.

(xi) The managerial remuneration under Section 197 is not applicable toprivate limited company and therefore paragraph 3(xi) of the Order is not applicable tothe company.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable to the company for the year under review.

(xiii) In our opinion and according to the information and theexplanations given to us the transactions with the related parties were in compliancewith Sec 177 and 188 of the Companies Act and the details of the same have been disclosedin Note 34 of the Financial Statements in conformity with Ind AS 24.

(xiv) The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year under reviewunder section 42 of the Companies Act 2013 and therefore paragraph 3 (xiv) of the Orderis not applicable to the company for the year under review.

(xv) The Company has not entered into any non-cash transactions withthe directors or persons connected with him and therefore paragraph 3(xv) of the Order isnot applicable to the company for the year under review.

(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934 and therefore paragraph 3(xvi) of the Order is notapplicable to the company for the year under review.

For BHUWANIA & AGRAWAL ASSOCIATES
(Chartered Accountants)
(Firm Registration no. 101483W)
Shubham Bhuwania
(Partner)
Membership No: 171789
UDIN : 21171789AAAAES7729
Date : 29th June 2021
Place : Mumbai

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