To the Members of PERFECT INFRAENGINEERS LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of PERFECT INFRAENGINEERS LIMITED("the Company") which comprise the balance sheet as at 31stMarch2020 and the statement of Profit and Loss and statement of cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 and its statement of Profit & loss of the profits and its cashflows for the year ended on that date.
We draw your attention to Note 30.3B which describes that the company in absence of anyfuture outcome has not made any provision for doubtful debts for the cases filed withNCLT.
Our opinion is modified for this matter.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountantsof India together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw your attention to Note 33 to the Statement which describes the uncertaintycaused by Covid-19 pandemic and the assessment made by the management on its business andfinancials. This assessment and the outcome of the pandemic is as made by the managementand is highly dependent on the circumstances as they evolve in the subsequent periods.
We draw your attention to Note 4 to the Statement whereby it describes that theCompany has availed moratorium on its existing loan facilities.
The balances in Trade Receivables and Trade Payables are subject to confirmation.
Due to the Covid-19 related lockdown we were unable to observe the Management'syear-end physical verification of inventory amounting to Rs.7.25 crores. We have performedalternate procedures to audit the existence of inventory as per the guidance provided inSA 501 "Audit Evidence - Specific Considerations for Selected Items". Weobserved that company has many slow moving items in inventory.
The internal Audit reports for second half year ended were not available till ourreporting.
Our opinion is not modified in respect of this matter.
Information Other than the Financial Statements and Auditor's Report
The Company's Board of Directors is responsible for the other information. The otherinformation comprises of the information included in the Board of Directors report butdoes not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon
The Company has opted for the reduced tax rate of 22% as per newly inserted section115BAA of the Income Tax Act1961 during the year ended March 312020 subject to thecondition that the company will not avail certain deductions/exemptions.
The opinion expressed in the present report includes the information facts and inputsmade available to us through electronic means by the Company's Management and relied uponby us because the Covid-19 had induced restrictions on physical movements.
Our opinion is not modified in respect of this matter.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof 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 statement that give a true and fair view andare 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.
The 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. Misstatements 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 we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate we are required to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure-A" a statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e. We have not received the written representations received from the directors as on31st March 2020 taken on record by the Board of Directors so as to comment that none ofthe directors are disqualified as on 31st March 2020 from being appointed as adirector in terms of Section 164 (2) of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure- B".
g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition except those mentioned in notes to accounts to the financial statement.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For JCR & Co
Chartered Accountants FRN- 105270W
MITESH Digitally signed by MITESH DAMJI DAMJI CHHEDA
CHHEDA 14:56:09 +05'30'
Mem. No. 160688
Date: 19th Sept2020
"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in paragraph 1 of our Report of even date to the Members of PERFECTINFRAENGINEERS LIMITED on the Standalone Financial Statements of the Company for the yearended 31st March 2020.
On the basis of such checks as we considered appropriate and/or according to theinformation and details given to us during the course of our audit we report that:
(i). In respect of Company's Fixed Assets:
(a). The Company has maintained records showing full particulars includingquantitative details and the situation of Fixed Assets. However asset tagging needs to bedone as part of improvement and demarcation.
(b). The Fixed Assets have been physically verified by the management at reasonableintervals and no material discrepancies were noticed on such verification.
(c). According to the information and explanations given to us and the records examinedby us and based on the examination of the title deeds comprising the immovable propertiesare held in the name of the Company. However we could verify only the photocopies asoriginal title deeds for most of the properties were lying with the bank as collateralsecurities.
(ii). We do not have information about the Inventory been physically verified by themanagement at reasonable intervals. Please refer to emphasis of matter in main auditreport We suggest the system of review needs improvement.
(iii). According to the information and explanations given to us the Company has notgranted/taken any loans secured or unsecured to/from companies firms limited liabilitypartnerships or other parties listed in the register maintained under Section 189 of theCompanies Act 2013. Hence the provisions of Clause(iii) of the Order are not applicable.
(iv). According to the information and explanations given to us and the recordsexamined by us the company has not granted any loans during the year covered underSections 185 &186 of the Act. Investments made by the Company are in compliance withthe provisions of Section 186 of the Act.
(v). According to the information and explanations given to us the Company has notaccepted any deposits from the public during the year covered under Sections 73 to 76 ofthe Act.
(vi). According to the information and explanations given to us maintenance of CostRecords has not been prescribed by the Central Government under Sub-section (1) of Section148 of the Act.
(vii). According to the information and explanations given to us in respect ofStatutory Dues:
(a). According to the information and explanations given to us and based on the recordsof the Company examined by us except for Rs.42.89 Lakhs due towards TDS PT and GST(Details provided below) the company is regular in depositing the undisputed StatutoryDues including Provident Fund Employees State Insurance Income Tax Goods & ServiceTax Custom Duty Value Added Tax Cess and any other material Statutory Dues to theextent applicable with appropriate authorities in India.
Details of Statutory Dues outstanding as on 31.03.2020:
|Particulars ||Amount (Rs.) |
|TDS ||295325 |
|GST ||3853191 |
|Professional Tax ||140375 |
|Total ||4288891 |
The above amounts are excluding of interest on delay and penal interest/late fee.
(b). According to the information and explanations given to us and based on the recordsexamined by us there are no dues in respect of Income Tax Service Tax Customs Duty andExcise Duty which have not been deposited on account of any dispute.
(c). Details of dues of Central Sales Tax and Value Added Tax which have not beendeposited as on 31st March 2020 on account of disputes are given below:
|Name of the Statute ||Nature of Dues ||Period to which the amount relates ||Forum where dispute is pending ||Amount involved |
| || || || ||(Rs. In Lakhs) |
|Maharashtra VAT Act ||VAT/CST ||2010-11 (Order received in March 2018) ||Appeal filed before Tribunal ||90.22 |
|Maharashtra VAT Act ||VAT/CST ||2013-14 (Order received in July 2018) ||Appeal filed before Tribunal ||114.05 |
(viii). The company has availed sanctioned soft loan of Rs. 750 Lakhs from Government(Technology Development Board) out of which Rs. 263 lakhs have been received during theyear and Rs.187 Lakhs were received in the previous year. But no amount was raised throughthe Debentures. On the basis of our examination of records the Company has not defaultedin repayment of loans or borrowing to a financial institution bank or government or duesto debenture holders.
(ix). Based on our audit procedures and according to the information given to us by themanagement the Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) or taken any term loan (except mentioned above)during the year. Hence the provisions of Clause(ix) of the Order are not applicable.
(x). During the course of our examination of the books and records of the Companycarried in accordance with the Auditing Standards generally accepted in India we haveneither come across any instance of fraud by the Company or on the Company by its officersor employees noticed or reported during the year not have been informed of any suchinstance by the Management.
(xi). According to the information and explanations given to us the managerialremuneration paid is in accordance with the provisions of Section 197 read with Schedule Vto the Act.
(xii). In our opinion and according to the information and explanations given to usthe Company is not a Nidhi Company. Hence the provisions of Clause (xii) of the Order arenot applicable.
(xiii). According to the information and explanations given to us the transactionsentered with related parties are in accordance with the provisions of Section 177 of theAct where applicable and the details of related party transactions have been disclosed inthe Standalone Financials Statements as required by the applicable accounting standards.
(xiv). According to the information and explanations provided to us and on an overallexamination of the Balance Sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under Clause (xiv) of the Order are notapplicable to the Company and not commented upon.
(xv). According to the information and explanations given to us the Company has notentered into non-cash transactions with the Directors or persons connected with him andhence the provisions of Clause (xv) are not applicable to the Company.
(xvi). According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
For JCR & Co
Chartered Accountants FRN- 105270W
MITESH Digitally signed by MITESH DAMJI DAMJI CHHEDA
CHHEDA 14:56:47 +05'30'
Mem. No. 160688
Date: 19th Sept2020
"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Perfect Infraengineers Limited ofeven date)
Report on the Internal Financial Controls Over Financial Reporting under Clause(i) OfSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of PERFECTINFRAENGINEERS LIMITED ("the Company") as of March 31 2020 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 Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. 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 respective 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 Act2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company 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 Section143(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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.
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.
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.
According to the information and explanations given to us and based on our audit thefollowing significant weakness has been identified as at 31st March 2020:
(a). The control mechanism in respect of design of controls needs improvement.
In our opinion except for the possible effects of the significant weakness describedabove on the achievement of the objectives of the control criteria the Company hasmaintained in all material respects adequate internal financials controls over financialreporting were operating effectively as of 31st March 2020 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 JCR & Co
Chartered Accountants FRN- 105270W MITESH
Digitally signed by MITESH DAMJI DAMJI CHHEDA
CHHEDA 14:57:26 +05'30'
Partner Mem. No. 160688
Date: 19th Sept2020