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P B A Infrastructure Ltd.

BSE: 532676 Sector: Infrastructure
NSE: PBAINFRA ISIN Code: INE160H01019
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OPEN 6.20
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VOLUME 5701
52-Week high 27.80
52-Week low 6.15
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.20
CLOSE 6.60
VOLUME 5701
52-Week high 27.80
52-Week low 6.15
P/E
Mkt Cap.(Rs cr) 9
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. PBA Infrastructure Limited (‘the Company') which comprise the balancesheet as at 31 March 2017 the statement of profit and loss and the cash flow statementfor the year then ended and a summary of significant accounting policies and otherexplanatory 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 thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act.

Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement. An audit involves performing procedures to obtain auditevidence about the amounts and the disclosures in the financial statements. 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. Inmaking those risk assessments the auditor considers internal financial control relevantto the Company's preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of 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 Rs 28.29 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 the ‘Basis for Qualified Opinion'paragraph above the aforesaid standalone financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 and its loss and its cash flows for the yearended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) Without qualifying our opinion we draw attention to Note. A-3.(f) to theaccompanying statement wherein Interest on some secured loan including bank guaranteesencashed and unsecured loan are under booked and its balances are subjects toconfirmation and reconciliation. We do not qualify our opinion on this matter.

b) Without qualifying our opinion we draw attention to Note. A-3.(e) to theaccompanying statement wherein the Company has overdue accumulated debts from banks andfinancial institutions over the period amounting to Rs 33443.55 Lakhs subject toreconciliation of interest payable secured by various assets of the company. Consortiumlead bank has taken symbolic possession of various secured assets against total consortiumoverdue debts of Rs 31596.12 Lakhs under Securitization and Reconstruction of FinancialAssets and Enforcement of Security Interest Act 2002. Company has also defaulted inrepayment of its Public Deposits and Inter Corporate Deposit on maturity and payment ofInterest thereon. These conditions indicate the existence of a material uncertainty thatmay cast apprehension about the Company's ability to function as a going concern. Howeverthe financial statements of the Company has been prepared on a going concern basis. We donot qualify our opinion on this matter.

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 termsof sub-section (11) of section 143 of the Act we give in the ‘Annexure-A' astatement on the matters specified in the paragraph 3 and 4 of the Order to the extentapplicable.

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) except for the possible effect of the matter described in the ‘Basis forQualified Opinion' paragraph above in our opinion proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks;

(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 the ‘Basis forQualified Opinion' paragraph above in our opinion the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014;

(e) on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act; and

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

(g) 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".

(h) 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 & 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.

iv. The Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016 and these are in accordance with the books ofaccounts maintained by the Company. Refer Note: C-12 to the standalone financialstatements.

For Ajay B Garg
Chartered Accountant
A Garg
Proprietor
Mem No: 032538
Place: Mumbai
Dated : 30th May 2017

‘Annexure – A' to the Independent Auditors' Report

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 2017 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 amounting to bodies corporate covered in theregister maintained under section 189 of the Companies Act 2013 (‘the Act').

(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the bodies corporate listed in the register maintained underSection 189 of the Act were not prima facie prejudicial to the interest of the Company

(b) In the case of the loans granted to the bodies corporate listed in the registermaintained under section 189 of the Act the borrowers have been regular in the payment ofthe interest and repayment of principal on demand. The terms of arrangements do notstipulate any repayment schedule and the loans are repayable on demand.

(c) There are no overdue amount for more than 90days in respects of the loan granted tobody corporate listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us 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 2017 for a period of more than six months from the date theybecame payable except followings:

Particulars Amount
(In Lakhs)
TDS 448.00
PF 1.71
Service Tax 35.28
Profession Tax 2.99
Entry Tax 3.41
MVAT 16.62

(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 2336.59 Appellate Authority VAT Mumbai
Rajasthan Entry Tax Act Entry Tax 341.67 Appellate Authority –RST
Income Tax Income Tax 164.68 CIT (A)Mumbai
Income Tax Income Tax 1588.01 ITAT Mumbai

(viii)Based on our Audit procedures and according to information and explanation givento us the Company has paid dues to banks with certain delay. The Company have overdueoutstanding dues to financial institutions banks as at 31st March 2017 asfollows:

I. Long Term Borrowing

Sr. No. Name of Bank Default Principal Default Interest Total Default Continuing Default
Amount Amount Amount Period
1 Royal Bank of Scotland 925396 44604 970000 Sept-12 to Mar-17
2 Srei Equipment Finance Ltd 47378079 7739902 55117981 April to Mar- 17
3 Tata Capital Ltd-Tata Hitachi 232499 1401 233900 Since Mar 14
4 Shriram Equipment Finance 19734608 2164785 21899393 Since Jan-14
Ltd
5 Canara Bank –LTL-1( CDR) 174000000 118984142 292984142 Since April 13
6 Canara Bank –LTL-II (CDR) 193200000 184326766 377526766 Since April 13
7 Canara Bank FITL 43537513 14216904 57754417 Since April 13
8 Union Bank –LTL-I ( CDR) 48297859 17204166 65502025 Since Oct-13
9 Union Bank –LTL-II ( CDR 7198641 2973017 10171658 Since July13
10 Union Bank –FITL-I 3916487 661721 4578208 Since March14
11 Union Bank –FITL-II 618301 101085 719386 Since April 14
12 State Bank of Patiala-CDR 35323895 9360000 44683895 Since June14
13 State Bank of Patiala –FITL 2562450 726000 3288450 Since June14
14 Karur Vysya Bank-CDR 51054386 9872101 60926487 Since Oct14
15 Karur Vysya Bank –FITL 3051244 453494 3504738 Since Dec-14

II) Short Term Borrowing :-

Sr. No. Name of Bank Period Amount of Default
1 IDBI Bank Ltd Since Feb 2013 75492729
2 Canara Bank –CC Since June 2013 803417619
3 Canara Bank-EMD Since April 2013 180803674
4 Canara Bank-BG Invoked Since July 2013 634836203
5 Union Bank of India–CC Since Jan 2014 15736744
6 Union Bank of India -OD Since March 2014 177596466
7 Union Bank of India-BG Invoked Since March 2014 120922645
8 State Bank of Patiala-CC Since Jan 2014 134920062
9 Karur Vysya Bank-CC Since Nov 2014 103274265
10 Punjab & Sind Bank -CC Since Sept 2015 177031416
11 Union Bank of India -EMD Since April 2013 59541851

(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) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided not withina limit given by the Act. Requisite approvals from Central Government mandated by theprovisions of section 197 read with Schedule V to the Companies Act has not been obtained;

(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.

(xiii)In 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.

(xiv)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.

(xv) 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.

(xvi)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
Proprietor
Mem No: 032538
Place: Mumbai
Dated : 30th May 2017

‘Annexure – B' to the Independent Auditor's Report

[Referred to in paragraph 2(g) 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 2017.]

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 2017 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 (‘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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.

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 31 March 2017 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
Proprietor
Mem No: 032538
Place: Mumbai
Dated : 30th May 2017