To the Members of
M/s PBA Infrastructure Limited
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial of M/s. PBA Infrastructure Limited("the Company") which comprise the Balance Sheet as at March 31 2022 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year ended and a summary of thesignificant and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis forQualified Opinion' section of our report the aforesaid financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2022 its loss including other comprehensive income its cash flows and the changes inequity for the year ended on that date.
Basis for Qualified i. The Company has not performed impairment testing withrespect to the investments in various Joint Ventures and Associates as required by IndianAccounting Standard (Ind AS 36) Impairment of assets'; hence the impact on thecarrying amount of investment is not ascertainable. (Ref. Note: A-2 of FinancialStatements) ii. Company follows accounting practice of recognizing revenue on the basispercentage completion method. Company being an EPC contractor raises claims/arbitrationmoney with its principals/ Customers for the delay on obtaining approvals costescalation etc. As per Company policy though the claims are raised for the actual lossincurred by the Company (SOC) the same is recognized in the books at realizable valuedetermined by the internal team of the Company. Though these claims are not acknowledgedby the principles/customer the same being intangible/uncertified being classified as workin progress. The said claims though classified under WIP (Current Asset) are subject touncertainty as to recoverability. Out of unbilled work in progress of Rs.173.72 Crores asat 31.03.2022 amount of Rs.143.78 Crore represents various claims raised on the Clientsbased on the terms and conditions implicit in the Engineering & Construction Contractsin respect of closed/ suspended/ under construction projects and which are overdue for asubstantial period of time. These claims are mainly in respect of cost over run arisingdue to suspension of works client caused delays changes in the scope of work deviationin design and other factors for which Company is at various stages ofnegotiation/discussion with the clients or under Arbitration/litigation. Based ondiscussions with principles/arbitrations (which are at variousaccounting stages)policieslitigations and on legal opinion /past experience with respect to such claims managementis of the view that the aforementioned balances are fully recoverable. (Ref. Note: A-8of Financial Statements)
iii. Fixed Asset register is still under compilation to have proper records showingfull particulars including quantitative details and situation of property plant andequipment. Company to have a regular program of physical verification of its fixed assetsperiodically. (Ref. Note: A-1 of Financial Statements)
iv. Other non-current Assets includes Rs.35.63 Crore towards Retention and Rs.2.37Crore towards deposits deducted under various project executed by the company but there isno collaborative evidence to justify the claim by the company. (Ref. Note: A-4 ofFinancial Statements)
v. There are arbitration proceedings/legal cases against by/the Company which mayresult in Compensation/ interest/penalties. (Ref. Note: A-25 of FinancialStatements) vi. The balance of Rs. 14.04 Crore under Project Mobilization Advance'pertains to the cost of technical consultancy expenses incurred before commencement ofwork on project for 4 laning of road from Solapur to Maharashtra/ Karnataka border on NH 9from Km 309+000 to Km 348+ 800. The project is already under process but the cost is notyet apportioned to the project which has resulted is understatement of revenue expenses.(Ref. Note: A-4 of Financial Statements) vii Balances of trade receivables tradepayables loansinnature and advances Deposits given/ taken are subject to confirmationsreconciliations and consequent adjustments.
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) as specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements' section of our report.
We are independent of the Company in accordance with the Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ourqualified audit opinion on the financial statements
Material Uncertainty Related to Going Concern
We draw attention to Notes of the Financial Statements that the Company has incurrednet loss during the year and the current liabilities have exceeded the current assets.Further The Company has defaulted in repayment of principal dues and interest payable tobanks. These events indicate that a material uncertainty exists that may cast significantdoubt on the Company's ability to continue as a going concern. Our opinion is not modifiedin respect of this matter.
Emphasis of Matters
We draw attention to the following matters: i. The company has made defaults inrepayment of its obligations towards its lenders and an amount of Rs. 315.15 Crores wasoverdue as per the SARFASEI Notice issued by the consortium bankers. Lead Bank underconsortium had approached CMM Court to take physical possession of the various securedassets against total consortium overdue of Rs. 315.15 Crore under SARFASEI Act 2002. TheCompany has also received notice of physical possession of various secured assets from thelenders in response to which the company has filed a counter case and received stay onproceedings from DRT court. Now out of these total overdue the amount of Rs. 26.50Crores of State Bank of Patiala is settled under the OTS Scheme of State Bank of India.The defaults indicate the existence of a material uncertainty that may cast apprehensionabout the Company's ability to function as a going concern. However the financialstatements of the Company have been prepared on a going concern basis & do not includeany adjustments that might result from the outcome of this uncertainty.
We would also like to draw attention to the fact that in absolute terms total outsideliabilities of the company exceed underlying current assets. ii. Certain current/cashcredit/term loan accounts from banks & financial institutions have not been reconciledas on 31.03.2022. Being classifiedas Non-Performing Assets by banks and financialinstitutions the Company has not been providing for interest since 1st January 2018 onany of the outstanding due from Banks and Financial Institutions. The same policy of notproviding interest has been continued in the FY 2021-22. In absence of the balanceconfirmations and statements of said loans from banks and financial institutions thebalance outstanding and interest charged thereupon by the lenders for FY 2021-22 remainsunascertainable. iii. As mandated by Ind AS 19 the company has not done theactuarial valuation of gratuity for the year 2021-
22. The amount of 37.08 lakhs (Ref. Note: A-20 of Financial Statements) includesprovision for gratuity of Rs. 26.30 lakhs which is taken without taking its actuarialvaluation.
However our opinion is not modified in all above these matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined that there are no key audit matters to communicate in this report.
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Director's report but does not include the financial statementsand our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.
Responsibility of Management and Those Charged with Governance for the FinancialStatements
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 financial statements that give a true and fair view of the stateof affairs(financial position) profit and including other comprehensive income) cashflows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Ind AS specified under Section 133 of the Actread with the Companies (Indian
Accounting Standards) Rules 2015 as amended.. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; 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 for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatement can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial Statements As part of an audit in accordance with SAs weexercise professional judgment and maintain professional scepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the financial Statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain (financial performance audit evidence that is sufficient and appropriateto provide 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 internetcontrol.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedure that are appropriate in the circumstances. Under Section
143(3) (i) of the Act we are also responsible for expressing our opinion on whetherthe 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 the reasonableness ofaccounting estimates and related disclosures made by the Board of Directors.
Conclude on the appropriateness of the Board of Directors' use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern.
If we conclude that a material uncertainty exists we are required to draw attention inour auditor's report to the related disclosures in the financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial Statementsincluding the disclosures and whether the financial Statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits . ofsuch communication
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor's Report) Order 2020 (the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure A' a statement on the matters specified in paragraphs 3 and4 of the Order.
2) As required by Section 143(3) of the Act we report that:
a. We have sought and except for the matter described in the Basis for QualifiedOpinion paragraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit;
b. Except for the matter described in the Basis for Qualified Opinion paragraph in ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and the Statement of changes in Equity dealt with by thisreport are in agreement with the books of account; d. Except for the effects of the matterdescribed in the Basis for Qualified Opinion paragraph above in our opinion theaforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 asamended;
e. The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company;
f. On the basis of written representations received from the Directors as on 31st March2022 taken on record by the Board of Directors none of the Directors is disqualified ason 31st March 2022 from being appointed as a director in terms of Section 164(2) of theAct; g. The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above;
h. With respect to the adequacy of the internal financial controls with reference tofinancial statements and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B" to this report;
i. The managerial remuneration paid by the Company to its directors is as per theprovisions of section 197 read with Schedule V of the Act for the year ended March 312022;
j. With respect to the other matters to be included in the Auditor's Report inaccordance with the Rule 11 of Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanation given tous:
i. The company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note No. A-25 to the financialstatements;
ii. Company did not have any Long term contract including derivatives contract as suchthe question of commenting on any material foreseeable losses thereon does not arise. iii.There were no amounts which were required to be transferred to the Investor Education andProtection Fund by the Company.
iv. (a) The management has represented that to the best of its knowledge and beliefno funds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the company to or in any other person(s)or entity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented that to the best of its knowledge and belief nofunds have been received by the company from any person(s) or entity(ies) includingforeign entities ("Funding Parties") with the understanding whether recordedin writing or otherwise that the company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party ("Ultimate Beneficiaries") or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries; and (c) Based on such auditprocedures that have been considered reasonable and appropriate in the circumstancesnothing has come to our notice that has caused us to believe that the representationsunder sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b) above containany material misstatement. v. The company has not declared or paid any dividend during theyear hence this clause is not applicable.
|CA Rohit Aherrao |
|Membership. No. 131647 |
|UDIN: 22131647AJXSME7995 |
|For and on behalf of |
|B P S D & Associates |
|Chartered Accountants |
|FRN: 118251W |
|Mumbai dated the 30th May 2022 |
Annexure A to the Independent Auditor's Report of even date to the members of PBAInfrastructure Ltd. on the financial statements for the twelve months period ended 31stMarch 2022
Referred to in Paragraph 1 under the heading Report on
Other Legal & Regulatory Requirements' of our report of even date to the financialstatement of the Company for the year ended March 31 2022 Based on the audit proceduresperformed for the purpose of reporting a true and fair view on the financial statements ofthe Company and taking into consideration the information and explanations given to us andthe books of account and other records examined by us in the normal course of audit andto the best of our knowledge and belief we report that: i. In respect of the Company'sfixed assets; a. Company has not been maintaining proper records showing full particularsincluding quantitative details and situation of property; plant and equipment. b. Companydoes not have a regular program of physical verification of its fixed assets which fixedassets are verified in a phased manner. In accordance certain fixed assets whereinprojects have been completed are not identifiable; hence discrepancies exist.
In our opinions this periodicity of physical verification needs to be reasonablehaving regard to the size of the Company and the nature of its assets. c. According to theinformation and explanation given to us the records examined by us and based on theexamination of the deed provided to us we report that the title deeds comprising allthe immovable properties of land which are freehold are held in the name of the companyas at the balance sheet date.
d. The company has not revalued its Property Plant and Equipment (including Right ofUse assets) or Intangible Assets during the year ended 31st March 2022.
e. There are no proceedings initiated or are pending against the company for holdingany benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder. ii. In respect of the Company's Inventory;
a. As explained to us the inventories have been physically verified during the year bythe management. In our opinion having regard to the nature and location of stocks thefrequency of the physical verification is reasonable. b. Company follows accountingpractice of recognizing revenue on the basis percentage completion method. Company beingan EPC contractor raises claims / arbitration money with its principals / Customers forthe delay on obtaining approvals cost escalation etc. As per Company policy though theclaims are raised for the actual loss incurred by the Company (SOC) the same isrecognized in the books at realizable value determined by the internal team of theCompany. Though these claims are not acknowledged by the principles / customer the samebeing intangible / uncertified nature is being classified as work in progress. The saidclaims though classified under WIP (Current Asset) are subject to uncertainty as torecoverability. Out of unbilled work in progress of Rs.173.72 Crores as at 31.03.2022amount of Rs.143.78 Crore represents various claims raised on the Clients based on theterms and conditions implicit in the Engineering & Construction Contracts in respectof closed / suspended/ under construction projects and which are overdue for a substantialperiod of time. These claims are mainly in respect of cost over run arising due tosuspension of works client caused delays changes in the scope of work deviation indesign and other factors for which Company is at various stages of negotiation/ discussionwith the clients or under Arbitration/ litigation. Based on discussions withprinciples/arbitrations (which are at various stages) litigations and on legal opinion /past experience with respect to such claims management is of the view that theaforementioned balances are fully recoverable. iii. According to the information andexplanations give to us and on the basis of our examination of records the Company hasnot granted unsecured interest free loans to its Joint Venture covered in the registermaintained under section 189 of the Companies Act 2013. Accordingly the requirement toreport on this clause is not applicable to the Company. iv. In our opinion and accordingto the information and explanations given to us the company has complied with theprovisions of section 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and security.
v. Company has not accepted any deposits from the public during the period of audit.However the company has accepted deposits from public in the past when Companies Act1956 was applicable. vi. We have broadly reviewed the books of accounts maintained by theCompany pursuant to the Companies (Cost records and audit) Rules 2014 and as prescribed bythe Central Government under section 148(1) of the Act and are of the opinion thatprima-facie the prescribed accounts and cost records have been made and maintained by theCompany. We have not however made a detailed examination of the cost records with a viewto determining whether they are accurate or complete. vii. According to the informationand explanations given to us:-a. Undisputed amounts payable in respect of provident fundincome tax sales tax wealth tax service tax duty of excise duty of customs ValueAdded Tax Goods & Service Tax cess have generally been regularly deposited to theappropriate authorities except for the following which were in arrears as at 31st March2022 for a period of more than six months from the date they became payable:-
|Particulars ||Amount (In Lakhs) |
|Professional Tax ||1.73 |
|TDS ||25.27 |
|GST ||58.46 |
|Provident fund ||0.95 |
b. There are no material dues of wealth tax duty of customs and cess which have notbeen deposited with the appropriate authorities on account of any dispute. However thefollowing dues of income tax sales tax service tax and value added tax have beendisputed by the Company:-
Statement of Disputed Dues
|Name of the Statute ||Nature of dues ||Amount (In Lakhs) ||Forum where dispute is pending |
|MVAT Act ||Tax & Penalty ||5850.43 ||Appellate Authority MVAT Mumbai |
|Rajasthan Entry Tax ||Tax ||337.15 ||High Court Rajasthan |
|Income Tax ||Tax ||856.14 ||CIT(A) Mumbai |
|Gujarat VAT ||Tax & Penalty ||10.91 ||Appellate Authority GVAT Ahmadabad |
|Sales Tax Jammu ||Tax & Penalty ||24.15 ||Jammu Sales Tax Authority |
viii. The Company has not surrendered or disclosed any transaction previouslyunrecorded in the books of account in the tax assessments under the Income Tax Act 1961as income during the year. Accordingly the requirement to report on clause 3(viii) of theOrder is not applicable to the Company. ix. Repayment of dues: a. In our opinion andaccording to the information and explanations given to us the Company has defaulted inthe repayment of dues to financial institutions and banks. The details of such default aregiven below. There are no loans or borrowings payable to Government and debenture holders.
Long Term Borrowings
| || ||(Amount in Rs.) |
|Sr. Name of Bank No ||Total Default Amount (including Principal and Interest) ||Continuing Default Period |
|1 Shriram Equipment Finance Ltd ||21899393 ||Since Jan-14 |
Short Term Borrowings
| || || |
(Amount in Rs.)
|Sr. No Name of Bank ||Total Default Amount ||Continuing Default Period |
|1 Canara Bank LTL-1(CDR) ||334006977.00 ||Since April 13 |
|2 Canara Bank CC ||905020999.00 ||Since June2013 |
|3 Canara Bank FITL ||61160780.00 ||Since April 2013 |
|4 Canara Bank LTL-II (CDR) ||430525361.00 ||Since April 2013 |
|5 Canara Bank-BG Invoked ||700440142.00 ||Since July2013 |
|6 Canara Bank-EMD ||181703831.00 ||Since April 2013 |
|7 Karur Vysya Bank FITL ||3504739.00 ||Since Dec-14 |
|8 Karur Vysya Bank-CC ||136841793.00 ||Since Nove2014 |
|9 Karur Vysya Bank-CDR ||64454165.00 ||Since Oct14 |
|10 Punjab & Sind Bank -CC ||197811206.00 ||Since Sept2015 |
|11 Union Bank FITL-I ||4899361.00 ||Since March14 |
|12 Union Bank FITL-II ||770053.00 ||Since April 14 |
|13 Union Bank LTL-I (CDR) ||72781487.00 ||Since Oct-13 |
|14 Union Bank LTL-II (CDR) ||11311470.00 ||Since July13 |
|15 Union Bank of India -EMD ||19311072.00 ||Since April 2013 |
|16 Union Bank of India -OD ||216061190.00 ||Since March 2014 |
|17 Union Bank of India-BG Invoked ||193588568.00 ||Since March 2014 |
|18 Union Bank of India CC ||17725991.00 ||Since Jan2014 |
b. The Company has not been declared wilful defaulter by any bank or financialinstitution or government or any government authority.
c. Term loans were applied for the purpose for which the loans were obtained.
d. On an overall examination of the financial statements of the Company the Companyhas not used funds raised on short-term basis for long term purpose.
e. On an overall examination of the financial statements of the Company the Companyhas not specifically taken any funds from any entity or person on account of or to meetthe specific obligations of its subsidiaries. The Company does not have any associate orjoint venture.
f. The Company has not raised loans during the year on the pledge of securities held inits subsidiaries joint ventures or associate companies. Hence the requirement to reporton clause (ix)(f) of the Order is not applicable to the Company.
x. Initial Public Offering: a) The Company did not raise money by way of initial publicoffer or further public offer (including debt instruments) but during the year company hastaken term loan from financial institutions which utilized for the purpose for which itwas raised.
b) The Company has not made any preferential allotment or private placement of shares /fully or partially or optionally convertible debentures during the year under audit andhence the requirement to report on clause 3(x)(b) of the Order is not applicable to theCompany.
xi. Fraud Reporting: a. According to the information and explanations given to us nomaterial fraud by the company or on the company by its officers or employees has beennoticed or reported during the year under audit. b. During the year no reports undersub-section (12) of section 143 of the Companies Act has been filed by the auditors inForm ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government.
c. As represented to us by the management there are no whistle blower complaintsreceived by the Company during the year. xii. In our opinion and according to theinformation and explanations given to us the Company is not a Nidhi Company. Thereforethe provisions of clause 3 (xii) of the Order are not applicable to the Company and hencenot commented upon.
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 theNotes to Financial Statements as required by the applicable accounting standards.
xiv. Internal Audit System:
a. The Company has an internal audit system commensurate with the size and nature ofits business.
b. The internal audit reports of the Company issued till the date of the audit reportfor the period under audit have been considered by us.
xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with its directors and hence requirement to report on clause 3(xv) Orderis not applicable to the Company. xvi. Non-Banking Financial Transactions:
a. The provisions of section 45-IA of the Reserve Bank of India Act 1934 (2 of 1934)are not applicable to the Company. Accordingly the requirement to report on clause(xvi)(a) of the Order is not applicable to the Company.
b. The Company has not conducted any Non- Banking Financial or Housing Financeactivities without obtained a valid Certificate Registration (CoR) from the Reserve Bankof
48 TH ANNUAL REPORT
India as per the Reserve Bank of India Act 1934. c. The Company is not a CoreInvestment
Company as defined in the regu1.5lations made by Reserve Bank of India. Accordinglythe requirement to report on clause 3(xvi) of the Order is not applicable to the Company.d. There is no Core Investment Company as a part of the Group hence the requirement toreport on clause 3(xvi)(d) of the Order is not applicable to the Company. xvii. Thecompany has neither incurred cash losses in the financial year nor in the immediatelypreceding financial year. xviii. There has been no resignation of the statutory auditorsduring the year and accordingly requirement to report on Clause 3(xviii) of the Order isnot applicable to the Company.
xix. On the basis of the financial ratios disclosed Notes to the financial statementsthe ageing and expected dates of realization of financial assets and payment of financialliabilities other information accompanying the financial statements our knowledge of theManagement / Board of Directors business plan and based on our examination of evidencesupporting the assumptions nothing has come to our attention which causes us to believethat Company is not capable of meeting its liabilities existing at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.
xx. CSR: As the company does not fall within the provisions of section 135 (5) of theCompanies Act 2013 the requirement of clause 3(xx) is not applicable to the company.
xxi. The requirement of clause 3(xxi) is not applicable in respect of StandaloneFinancial Statements.
|CA Rohit Aherrao |
|Membership No. 131647 |
|UDIN: 22131647AJXSME7995 |
|For and on behalf of |
|B P S D & Associates |
|Chartered Accountants |
|FRN: 118251W |
|Mumbai dated the |
|30th May 2022 |
Annexure B to the Independent Auditor's Report of even date to the members of PBAInfrastructure Limited on the financial statements for the 12 months period31 ended on stMarch 2022
Referred to in paragraph 2(g) under the heading Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of theCompany for the year ended March 31 2022
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 March 312022 financialstatementsof the Company for the conjunctionwithourauditofthe year ended on that date.
Management's Responsibility for Internal Financial Controls
Company's management is responsible for establishing and maintaining internal financialcontrols based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India (ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficientconduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the CompaniesAct 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financialreporting 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 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 . We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the Company's internal financial controls system over financialreporting.
Meaning of Internal Financial Controls Over Financial Reporting
Company's internal financialcontrol over financialreporting is a process designed toprovide 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 reflectthe 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial at March31 2022 based on the internal control over financial reporting criteria established bythe considering the essential components of internal control stated in the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting issued by the Instituteof Chartered Accountants of India.
|CA Rohit Aherrao |
|Mem. No. 131647 |
|UDIN: 22131647AJXSME7995 |
|For and on behalf of |
|B P S D & Associates |
|Chartered Accountants |
|FRN: 118251W |
|Mumbai dated the |
|30th May 2022 |