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Pratibha Industries Ltd.

BSE: 532718 Sector: Infrastructure
NSE: PRATIBHA ISIN Code: INE308H01022
BSE 00:00 | 17 Jun Pratibha Industries Ltd
NSE 05:30 | 01 Jan Pratibha Industries Ltd
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OPEN 0.72
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VOLUME 16720
52-Week high 0.74
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 17
Buy Price 0.72
Buy Qty 1620.00
Sell Price 0.75
Sell Qty 2730.00

Pratibha Industries Ltd. (PRATIBHA) - Auditors Report

Company auditors report

To

The Members of

PRATIBHA INDUSTRIES LIMITED

Report on the audit of the standalone financial statements

Disclaimer of Opinion

We were engaged to audit the accompanying standalone financial statements of PRATIBHAINDUSTRIES LIMITED ("the Company") which comprises the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity the Statement of Cash Flows for the year then endedand notes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information.

We do not express an opinion on the accompanying standalone financial statements of theCompany. Because of the significance of the matters described in the Basis for Disclaimerof Opinion paragraph of our report we have not been able to obtain sufficient appropriateaudit evidence to provide a basis for an audit opinion on these standalone financialstatements.

Basis for Disclaimer of Opinion

1. Inventory of Work in Progress (WIP) includes certain contractual claim amounting toRs.310.60 Crores. These amounts have been ascertained by the management based on theirestimates. Out of these contractual claims claims amounting to Rs. 259.33 Crores areeither formally submitted but not yet approved by respective clients or no formalsubmissions have been made to respective clients. The amounts of these claims are subjectto change post approval from respective clients. To the extent of Rs. 259.33 CroresInventories are overstated and accumulated losses are understated in the standalonefinancial Statements.

2. The management has not provided detailed working of Construction Work in Progress(WIP) Cost to Completion and consequent profits or losses in the projects which arepending for execution. In absence of these details it is not possible for us to ascertainwhether the Construction WIP of Rs. 5.63 Crores has been valued and stated correctly ornot. The consequential impact if any on the standalone financial Statements is thereforenot ascertainable.

3. Balance confirmation of trade Receivables Loans and Advances deposits and tradepayables are not received from third parties. These balances are subject to confirmationsand consequent adjustments if required. In absence of balance confirmations financialimpact on standalone financial Statements is not ascertainable.

4. As per the bank loan statements made available to us by the management the bankshad charged Rs. 25.55 Crores on account of interest and other charges for the period fromFebruary 01 2019 to March 31 2019. However the company had not made provision for suchinterest and charges due to commencement of CIRP period under IBC. To that extent loanliabilities and accumulated losses are understated.

5. Certain loan accounts of company having aggregate balance of Rs. 461.72 Crores inthe books of accounts are not reconciled with their respective bank statements which areshowing aggregate balance of Rs. 370.42 Crores. Thus loan balances are overstated inbooks of accounts by Rs. 91.30 Crores.

6. Certain current accounts of the company having aggregate balance of Rs. 0.04 Croresin the books of accounts are not reconciled with their respective bank statements whichare showing aggregate balance of NIL. Thus current bank balances are overstated in booksof accounts by Rs. 0.04 Crores.

7. Many loan accounts of the Company having aggregate balance of Rs. 4445.37 Croresand current accounts of the Company having aggregate balance of Rs. 16.85 Crores are notconfirmed due to non-availability of statement / confirmation from respective Banks. Inabsence of sufficient appropriate audit evidence we are unable to determine any possibleimpact thereof on Standalone financial Statements.

8. In the reconciliation statement of various bank accounts of the Company there aremany entries relating to Receipts and Payments having aggregated value of Rs. 9.75 Croresand Rs. 9.43 Crores respectively which are pending to be cleared since long. To theextent of Rs. 0.32 Crores the bank balance is overstated. In absence of complete detailssuch receipts and payments we cannot ascertain the overall impact on Standalone financialStatements.

9. The Company has an unconfirmed balance of Fixed Deposits amounting to Rs. 13.81Crores as at March 31 2020. In absence of balance confirmation from the banks financialimpact on Standalone financial Statements is not ascertainable.

10. The Company has given loans and advances to various related parties amounting toRs. 979.25

Crores. As per the information given by the Company's management and as reported in theaudit reports of these parties for the FY 2019-20 all these related parties have madesubstantial losses and their net worth have been fully eroded. However the Company hasnot made any provision for possible loss on such loans and advances.

11. The company has not provided audited financial statements of its wholly ownedsubsidiary M/s.

Pratibha Holdings (Singapore) Pte. Ltd. In absence of these Financial Statements wecannot comment on any requirement for provision for diminution in value of investment.

12. The Company has not made provision for impairment against Investment of Rs. 0.01Crore in its subsidiary M/s. Bhopal Sanchi Tollways Private Limited. As informed to usits Concession Agreement has been terminated by NHAI and the subsidiary company has lodgedclaim and the matter is under arbitration.

13. There are many statutory dues amounting to Rs. 153.59 Crores which are pending tobe deposited with appropriate government authorities by the Company. The company has notmade provision for interest on these dues on account of delay in depositing them. Sincethe management of Company has not estimated overall liability on account of interestfinancial impact on Standalone financial Statements is not ascertainable.

14. The RP/Liquidator has received various claims of disputed statutory dues pertainingto VAT/CST

Income Tax and Central Excise aggregating to Rs. 351.16 crores. However since theoutcome of the cases are not known to the RP/Liquidator no provisions have been made inthe Books of accounts. In absence of complete details of litigations we cannot ascertainimpact on standalone financial statements.

15. The company has not provided sufficient appropriate information to evaluate theaccuracy of recognition measurement and presentation of revenues and other relatedbalances in view of the applicability of Ind AS 115 "Revenue from Contracts withCustomers". The company has not evaluated impact of variable consideration on itsrevenue as required under IND AS 115.

16. During the year the Company has unilaterally written back certain liabilitiesamounting to Rs. 1.33

Crores. The management of the Company is of the opinion that based on their analysis ofbalances and due to various reasons these balances were not payable and hence writtenback. To that extent the liabilities current quarter's loss and accumulated losses areunderstated.

17. The company has not made Provision for Employee Benefits in accordance with Ind AS19. The management is in opinion that since the matter is under CIRP and also majority ofthe employees have already left the company there will be no additional liability onaccount of employee benefits. In absence of valuation report we cannot comment on theimpact on standalone financial Statements.

18. Foreign currency balance of certain foreign vendors having aggregate balance ofRs. 4.50 Crores as per Books of accounts as at March 31 2020 could not be ascertaineddue to improper accounting. In the absence of these details their balances could not betranslated as required under IND AS 21 and consequential impact on standalone financialStatements could not be ascertained.

19. The balance with statutory authorities includes credits for Service Tax and ExciseDuty amounting to Rs. 24.44 Crores. The company has not filed Service Tax and ExciseReturns since 2016-17 to claim credits against Service Tax and Excise Duty liabilities.In absence of submission of returns the credits cannot be utilized. To this extent thecurrent assets are overstated and accumulated losses are understated.

20. The Company has not maintained detailed Party wise outstanding of Public Depositsand the provision for penal interest has not been made since February 2019 due to thecommencement of CIRP period under IBC. In the absence of these details consequentialimpact on standalone financial Statements could not be ascertained.

21. As required under the provisions of Section 148 of the Companies Act 2013 readwith Rule 4 of the Companies (Cost Records and Audit) Rules 2014 the cost audit has notbeen conducted of company's records.

22. As required under the provisions of Section 138 of the Companies Act 2013 readwith Rule 13 of the Companies (Accounts) Rules 2014 the Internal Audit of the functionsand activities of the company has not been conducted for the year ended March 31 2020.

Material Uncertainty Related to Going Concern

The company has accumulated losses of Rs. 4972.26 Crores and its net worth is fullyeroded. It has incurred net loss during the year ended March 31 2020 amounting to Rs.63.50 Crores as well as in previous years. It is unable to repay its debts statutoryobligations and pay salaries apart from other obligations/commitments. The application ofFinancial Creditors under section 9 of the Insolvency and Bankruptcy Code (IBC) had beenadmitted by Hon'ble National Company Law Tribunal ("NCLT") Mumbai Bench andResolution Professional ("RP") was appointed vide order dated March 14 2019.Since no resolution plan had been approved application for liquidation of the Company hadbeen filed with the NCLT. NCLT vide its order dated February 8 2021 has approvedliquidation of the company.

All these indicate a material uncertainty about the Company's ability to continue as aGoing Concern. However the standalone financial statements are prepared on a goingconcern basis.

Responsibilities of Management and those charged with Governance for the StandaloneFinancial Statements

The application of Financial Creditors under section 9 of the Insolvency and BankruptcyCode (IBC) had been admitted by Hon'ble National Company Law Tribunal Mumbai Bench andResolution Professional ("RP") was appointed vide order dated March 14 2019.Since no resolution plan had been approved application for liquidation of the Company hadbeen filed with the NCLT. NCLT vide its order dated February 8 2021 has approvedliquidation of the company. Resolution Professional Mr. Anil Mehta has been appointed asLiquidator by the NCLT. The management & operations of the Company are being managedby Liquidator on a Going Concern Basis.

The Company's management is responsible for the matters in section 134(5) of theCompanies Act 2013 ("the Act") with respect to the preparation and presentationof these standalone financial statements that give a true and fair view of the financialposition financial performance(including other comprehensive income) statement ofchanges in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in Indiaincluding the Indian Accounting Standards specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the Company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of internal financialcontrol that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The management is also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our responsibility is to conduct an audit of the standalone financial statements inaccordance with Standards on Auditing and to issue an auditor's report. However becauseof the matter described in the Basis for Disclaimer of Opinion section of our report wewere not able to obtain sufficient appropriate audit evidence to provide a basis for anaudit opinion on these standalone financial statements.

We are independent of the entity in accordance with the ethical requirements inaccordance with the requirements of the Code of Ethics issued by ICAI and the ethicalrequirements as prescribed under the laws and regulations applicable to the entity.

Report on Other Legal and Regulatory Requirements

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 on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

As required by section 143(3) of the Act we report that: a. As described in the Basisfor Disclaimer of Opinion paragraph we sought but were unable to obtain all theinformation and explanations which to the best of our knowledge and belief were necessaryfor the purpose of our audit;

b. due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether proper books of account as required bylaw have been kept by the Company so far as appears from our examination of those books;

c. due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the Balance Sheet Statement of Profitand Loss (including Other Comprehensive Income) the statement of Changes in Equity andStatement of Cash Flows dealt with by this Report are in agreement with the books ofaccount;

d. due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the aforesaid financial statementscomply with the Indian Accounting Standards under Section 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014;

e. the matters described under the Basis for Disclaimer of Opinion paragraph and theMaterial

Uncertainty Related to Going Concern paragraph in our opinion may have an adverseeffect on the functioning of the Company.

f. on the basis of information available on the MCA website all the directors aredisqualified as on

31 March 2020 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 Disclaimer of Opinion paragraph above.

h. with respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols we give our separate Report in "Annexure B".

i. with respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit &Auditor's ) Rules2014 in our opinion and toour best of our information and according to the explanations given to us :

a. Due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the Company has disclosed the impact ofpending litigations on its financial position in its financial statements – ReferNote No. 36 to the Standalone Financial Statements;

b. Due to the possible effects of the matter described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the Company has made provision asrequired under the applicable law or accounting standards for material foreseeablelosses if any on long-term contracts including derivative contracts;

c. Following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company:

Amount Due Date Date of Payment
97791 30th September 2018 2010-11
113493 30th September 2019 2011-12
115700 30th September2020 2012-13
For Ramanand & Associates
Chartered Accountants
ICAI Firm Registration Number: 117776W
Ramanand Gupta
Managing Partner
Membership No.: 103975
UDIN: 21103975AAAAIR5489
Date: 26th March2021.
Place: Mumbai

Annexure "A" to the Independent Auditor's Report

The Annexure referred to in our report to the members of PRATIBHA INDUSTRIES LIMITED(‘The Company') on the standalone financial statements for the year ended 31st March2020. We report that:

i. In respect of its fixed assets:

a. The Company has maintained records showing particulars including quantitativedetails and situation of fixed assets. However locations of the assets are not updated inrecords.

b. During the year physical verification of Fixed Assets was not conducted and noimpairment testing was done for any assets. We are informed by the management thatphysical verification could not be conducted on account of no access to various site dueto termination of contracts. In absence of complete physical verification of the assetswe can't comment on material discrepancies on such physical verification.

c. According to the information and explanations given to us the title deeds ofimmovable properties recorded as fixed assets in the books of account are held in the nameof the company. ii. In respect of inventories according to the information andexplanation given to us the physical verification of inventory was not conducted at theend of the year.In the absence of physical verification of inventories we can't commenton material discrepancies on such and its consequential impact on the financial statement.As regards inventory in the nature of Work in Progress reference is invited to para1&2of Basis for Disclaimer of Opinion of our report.

iii. According to information and explanations given to us during the year theCompany has not granted unsecured loans to parties covered in the register maintainedunder Section 189 of the Companies Act 2013.

iv. In our opinion and according to the information and explanations given to us inrespect of loans investments guarantees and security provisions of section 185 hasbeen complied with. However during the year it has granted loan to its three JointVenture companies which is non-compliance of section 186(2) as the company's net worth isfully eroded. Also these loans are interest free unsecured loans to which is innon-compliance of provisions of section 186(7).

v. The Company has accepted deposits from the public. As per our verification ofrecords and information & explanations given to us except the provisions of section73(3) and 74(3)the company has complied with the provisions of sections 73 to 76 or anyother relevant provisions of the Act and the rules framed there-under where applicable.As per information & explanations given to us as per the requirements of section73(3)the company has failed to repay the amount of deposits & interest thereon onmaturity. Further the order has been passed by Company Law Board under section 74 (2) ofthe Companies Act 2013. As per the requirement of the order and section 74 (3) of the Actthe company has failed to repay deposits amounting to Rs. 1848.20 Lakhs and interestthereon amounting to Rs. 1209.68 Lakhs. As regards Public Deposits and interest thereonreference is invited to Para 20 of Basis for Disclaimer of Opinion of our report. Furtherdirectives issued by the Reserve Bank of India are not applicable to the company.

vi. We are not provided with the books of accounts required to be maintained by theCompany pursuant to the rules prescribed by the Central Government under Section 148(1) ofthe Companies Act 2013. We therefore can not comment on their accuracy or completeness.

vii. In respect of statutory dues:

a. According to information and explanations given to us and on the basis of ourexamination undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Sales Tax Wealth Tax Service Tax duty of Customs Duty ofExcise Value Added Tax Goods & Service Tax Cess and other material statutory dueshave not been regularly deposited with the appropriate authorities and there have beensignificant delays in payment of statutory dues.

According to the information and explanations given to us undisputed amounts payablein respect thereof which were outstanding as at March 31 2020 for a period of more thansix months from the date of becoming payable are as follows:

Nature of Dues Amount (Rs. in Lakhs) Period to which amount relates Due Date
Provident Fund 669.86 Upto August 2019 Various due dates
Employee State Insurance 127.61 Upto August 2019 Various due dates
Profession Tax 72.16 Upto August 2019 Various due dates
Maharashtra Labour Welfare Fund 2.18 Upto August 2019 Various due dates
Service Tax 3573.73 Upto June 2017 Various due dates
Excise Duty 12.60 Upto June 2017 Various due dates
Customs Duty 572.58 2016-17 31-03-2017
Tax Deducted At Source 2246.04 Upto August 2019 Various due dates
Tax Collected At Source 0.64 Upto August 2019 Various due dates
Value Added Tax 812.28 Upto June 2017 Various due dates
Goods and Service Tax 277.15 Upto August 2019 Various due dates

During CIRP period the RP has received following claims from statutory authoritiesagainst which no litigations were pending:

Name of Statutory Authority Amount Claimed Claims Verified
(Rs. In Lakhs) (Rs. In Lakhs)
GST Department - Maharashtra (VAT CST) - FY 2015-16 and FY 2016-17 4376.28 4376.28
Assistant Commissioner of Customs EPCG
(Monitoring Cell) Export New Customs 139.63 139.63
House Ballard Estate Mumbai
Commissioner of Customs (NS-II) JNCH Nhava Sheva Mumbai 2815.74 -
Office of the Director General of GST Intelligence Mumbai Zonal Unit 3483.02 19.18
Assistant Commissioner of Income Tax (TDS) - (2)(1) Mumbai 3317.47 3317.47
Recovery Officer Employee Provident Fund Organization Delhi (East) 2139.81 -
Deputy Excise and Taxation Commissioner (ST) Gurugram South 774.37 774.37
Regional Provident Fund Commissioner - I Employee Provident Fund Organization Regional Office Delhi (East) 39.34 -
Total 17085.67 8626.94

*These amounts are not reconciled with balances appearing in Books of accounts. b.According to the information and explanations given to us dues that have not beendeposited by the Company on account of disputes are as follows:

Nature of the dues Amount (Rs. in Lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax 1699.46 AY 2000-01 to AY 2008-09 Mumbai High Court
Income Tax 12438.13 AY 2006-07 to AY 2013-14 ITAT Mumbai
Income Tax 17600.56 AY 2011-12 to AY 2015-16 Commissioner (Appeals) – 51 Mumbai

During CIRP during CIRP period the RP has received following claims from statutoryauthorities against which litigations were pending:

Name of Statutory Authority Amount Claimed Claims Verified
(Rs. In Lakhs) (Rs. In Lakhs)
Deputy Commissioner of Commercial
Taxes Bangalore Karnataka VAT - FY 2010-11 and FY 2011-12 2451.86 2451.86
GST Department - Maharashtra (VAT CST) - FY 2008-09 to FY 2012-13 3780.67 3780.67
GST Department - Maharashtra (VAT CST) - FY 2012-13 and FY 2014-15 5941.03 5941.03
Deputy Commissioner of Income Tax - Central Circle 3(1) Mumbai 17600.56 17600.56
Assistant Commissioner of CGST & CENTRAL EXCISE Mumbai East 3431.52 3431.52
GST Department - Maharashtra (VAT CST)
- Interest Order - FY 2008-09 to FY 2012- 13 1910.44 1910.44
Total 35116.08 35116.08

# The outcome of the above cases are not known to the Resolution Professional.

## No provisions have been made in the Books of accounts in absence of complete detailsand records.

viii. In our opinion and according to the information and explanations given to us theCompany has defaulted in repayment of following dues to the financial institutions andbanks during the year which were not paid as at the Balance Sheet date:

Name of Bank/ FI No. of Installment Total Amount of Defaults (Rs. in Lakhs) Range of Delay
Allahabad Bank 16 5472.00 91 – 1461
Bank of Baroda 6 3000.00 700 – 1154
Bank Of Maharashtra 8 10000.00 790-1431
Central Bank Of India 12 3813.75 30-1034
Export Import Bank Of India 5 12100.00 1095-1460
BMW Financial Services 2 2.48 396-424
Daimler Financial Services 17 34.00 29-729

Further company has not issued debentures.

ix. According to the information and explanation given to us during the year thecompany has neither raise money by way of initial public offer or further public offer norhas received any Term loan.

x. According to the information and explanation given to us no fraud by the company oron the

Company by its officers or employees has been noticed or reported during the year. xi.According to the information and explanation given to us and on the basis of an overallexamination of books of accounts of the Company no managerial remuneration has been paidor provided during the year.

xii. According to the information and explanation given to us the company is not aNidhi Company.

Therefore provisions of clause 3(xii) of the order are not applicable to the company.

xiii. During the FY 2019-20 the company was under CIRP period under the provisions ofIBC. The powers of Board of Directors are suspended and RP was responsible to manage theoperations of the Company. Thus the related party transactions disclosed in standaloneFinancial Statements are not in compliance with sections 177 and 188 of Companies Act2013 as there was not Audit Committee and Board of Directors in place.

xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.

xv. According to the information and explanation given to us the company has notentered into any non-cash transactions with directors or persons connected with him duringthe year.

xvi. According to the information and explanation given to us the company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Ramanand & Associates
Chartered Accountants
ICAI Firm Registration Number: 117776W
Ramanand Gupta
Managing Partner
Membership No.: 103975
UDIN: 21103975AAAAIR5489
Place: Mumbai
Date: 26th March2021.

Annexure "B" to the Independent Auditor's Report

[Referred to under ‘Report on Other Legal and Regulatory Requirements' in theIndependent Auditor's Report of even date to the members of PRATIBHA INDUSTRIES LIMITED onthe standalone financial statements for the year ended March 31 2020]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

1. We were engaged to audit the internal financial controls with reference tostandalone financial statements of Pratibha Industries Limited ("the Company")as of March 31 2020in conjunction with our audit of the standalone financial statementsof the Company for the year ended on that date.

2. Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to standalone financialstatements 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.

3. Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing specified undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both issued by the Institute of Chartered Accountants of India. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to standalone financial statements was established and maintainedand if such controls operated effectively in all material respects.

Because of the matter described in the Disclaimer of Opinion paragraph below we werenot able to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on internal financial controls system with reference to the standalone financialstatements of the Company.

4. Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control with reference to financial statements 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 withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 expenditure 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.

5. Basis for Disclaimer of Opinion

We are unable to obtain sufficient appropriate audit evidence on which to base ouropinion on the effectiveness of Company's internal financial controls with reference tostandalone financial statements because of the significance of the following matters: a)The Company did not have an appropriate internal control system for preparing debtorsageing and making provision for doubtful debts. This could potentially result innon-booking of provision for doubtful debts.

b) The Company did not have an appropriate internal control system for obtainingexternal balance confirmation on periodic basis. This could potentially result ininaccurate assets & liabilities disclosed in the books of accounts.

c) The company did not have an appropriate internal control system for reviewingcomputation of Construction Work in Progress (WIP) Cost to Completion and estimatedprofitability of all projects regularly. This could potentially result in inaccuratedisclosure of WIP and consequent profitability.

d) The company did not have an appropriate internal control system to collect bankstatements / balance confirmations in respect of its various current and loan accounts.This could lead to long outstanding entries in the bank reconciliation statements andunreconciled balances of various bank accounts on Balance Sheet date.

e) The company did not have an appropriate internal control system of maintainingupdated bank fixed deposit register tracking maturity of FDs and accounting for intereston timely basis. This could potentially result in inaccurate reporting of the balance offixed deposit accrued interest and interest income.

f) The company did not have an appropriate internal control system with respect to thedetails of the Public Deposit holders. This could lead to inability to track the balanceof amount outstanding to individual deposit holders and inaccurate accounting of thepenal interest in absence of such individual balances.

g) The company did not have an appropriate internal control system for physicalverification and safeguarding of its Property Plant & Equipment. This couldpotentially result in misrepresentation of the existence and valuation of the assets.

h) The company did not have an appropriate internal control system for reconcilingbalances of foreign vendors in INR and applicable foreign currency. This could potentiallyresult in inaccurate translation of foreign currency balance in INR balance on Balancesheet date.

i) The company did not have an appropriate internal control system over updation ofaccounts on timely basis. Booking of many entries are delayed on account of delayedreceipt of records. There is lack of coordination between different divisions of thecompany. These all could potentially result in misstatement of financial statements.

j) The company did not have an appropriate internal control system of checking theinterest levied by Lenders. This could potentially lead to overcharging by Lenders andincrease in Finance Cost of the company.

k) The company did not have an appropriate internal control system of callingQuotations from more than one Vendor while placing order. This could potentially lead toinefficient procurement and increased cost.

l) The company did not have mechanism to track booking of expenses against advancespaid. This could potentially lead to unauthorised payment and non-adjustment of advanceagainst corresponding liability.

6. Disclaimer of Opinion

As described in the Basis for Disclaimer paragraph above because of the significanceof the matters we are unable to obtain sufficient appropriate audit evidence to provide abasis for our opinion on whether the Company had adequate internal financial controls withreference to standalone financial statements and whether such internal financial controlswere operating effectively for the year ended March 31 2020 based on the internal controlwith reference to standalone financial statements 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 ICAI.

We have considered the disclaimer reported above in determining the nature timing andextent of audit tests applied in our audit of the standalone financial statements of theCompany for the year ended March 31 2020 and the disclaimer has affected our opinion onthe financial statements of the standalone Company and we have issued a disclaimer ofopinion on the financial statements for the year ended on that date.

For Ramanand & Associates
Chartered Accountants
ICAI Firm Registration Number: 117776W
Ramanand Gupta
Managing Partner
Membership No.: 103975
UDIN: 21103975AAAAIR5489
Place: Mumbai
Date: 26th March2021.

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