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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
CLOSE 0.72
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) - Director Report

Company director report

To

The Members

Pratibha Industries Limited

Your Directors/Resolution Professional have pleasure in presenting the 24th AnnualReport together with the financial statements for the financial year ended 31st March2019.

FINANCIAL HIGHLIGHTS

The performance of the Company for the financial year ended 31st March 2019 issummarized below:

(Rs. in Crores)

Particulars

Standalone

Consolidated

31.03.2019 31.03.2018 31.03.2019 31.03.2018
Total Revenue 369.66 1010.45 440.32 1241.40
Total Expenditure 1958.53 3813.92 2010.26 4062.79
Profit/(loss) before Tax -1588.87 -2803.47 -1569.94 -2821.39
Less: Provision of Taxation -0.40
Profit/(loss) After Tax -1588.87 -2803.47 -1569.94 -2820.99
Add: Share in Profit/(loss) of Joint Ventures/Associates (net) & -46.56 -1.86
Adjustment for Non-Controlling interest in Subsidiaries
Net Profit after Tax Non-Controlling interest and share in Profit/(loss) of Joint Ventures -1588.87 -2803.47 -1616.50 -2822.85
Other Compressive Income -0.15 -0.02 -0.16
Total Comprehensive Income -1588.87 -2803.62 -1616.52 -2823.01
Earnings Per Share (in Rs.)
Basic -66.59 -117.5 -67.75 -118.31
Diluted -66.59 -117.5 -67.75 -118.31

PERFORMANCE REVIEW

During the financial year 2018-19 (‘FY 2019' or ‘year under review') theturnover of the Company has been sharply declined due to non-receipt of new projects/work.The Company was facing severe financial crisis. Due to which the Company is intoCorporate Insolvency Resolution Process ("CIRP") w.e.f. 01.02.2019 details ofthe same is given in the notice of this AGM.

During the year under review most of the ongoing contracts were given on back to backbasis due to liquidity crunch in the Company.

DIVIDEND

In view of losses no dividend has been recommend for the F.Y. 2018-19.

TRANSFER TO GENERAL RESERVE

The Directors do not propose to transfer any amount to the General Reserve.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed as Annexure -A to thisReport.

SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES

The names of companies which are subsidiaries associates and joint ventures of theCompany are provided under point III of MGT 9. Pursuant to the provisions of Section 129and other applicable provisions of the Companies Act 2013 ("the Act") read withrules framed thereunder the Company has prepared consolidated financial statements of theCompany and its subsidiaries associate companies and joint ventures in accordance withIND AS-27 on Consolidated Financial Statements read with IND AS-31 on interest in JointVentures and IND AS-28 on Investments in Joint Ventures and a separate statementcontaining the salient features of financial statements of subsidiaries joint venturesand associates in Form AOC-1 are attached to the said consolidated financial statementforming part of the Annual Report.

The business highlights of subsidiaries have been covered in Management Discussion andAnalysis forming part of this Annual Report.

FIXED DEPOSITS

The Company has not invited accepted and renewed fixed deposits from public/membersduring the year under review.

The Company had accepted public deposits prior to the commencement of the Act.

After the Commencement of CIRP all the FD holders are required to submit their claimin respect of their outstanding dues before the Resolution Professional.

DIRECTORS

During the financial year under review Mr. Sharad Deshpande- Director of the Companyresigned on 25th December 2018. All the Directors of the Company are disqualified u/s 164(2) of the Companies Act 2013.

KEY MANAGERIAL PERSONNEL

During the year under review Mrs. Bhavana Shah Company Secretary resigned on 29thDecember 2018.

MEETINGS OF THE BOARD

The details of meetings of Board and its Committees held during FY 2018-19 and otherprescribed information are provided in the Corporate Governance Report forming part ofthis Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Act your Directors herebyaffirm that: (a) in the preparation of the annual accounts the applicable IND AS havebeen followed along with proper explanation relating to material departures; (b) theDirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the loss ofthe Company for that period; (c) the Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; (d) the Directors have prepared the annual accounts on a goingconcern basis; (e) the Directors have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and were operatingeffectively; and (f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

STATUTORY AUDITORS

M/s. Ramanand & Associates Chartered Accountants (ICAI Firm Registration Number117776W) were appointed as the Statutory Auditors of the Company to hold office for a termof 5 years from the conclusion of the 22nd Annual General Meeting (AGM) held on 29thSeptember 2017 until the conclusion of the 27th Annual General Meeting (AGM) of theCompany to be held in the year 2022.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th May2018 amending section 139 of the Companies Act 2013 the mandatory requirement forratification of appointment of Auditors by the Members at every AGM has been omitted andhence your Company has not proposed ratification of appointment of M/s. Ramanand &Associates Chartered Accountants at the forthcoming AGM.

AUDITORS' REPORT

The Auditors have made certain qualified observations in their Reports.

The statement on impact of audit qualifications as stipulated in Regulation 33(3)(d) ofSEBI (LODR) Regulations is enclosed hereto as Annexure B.

COST AUDITORS

Pursuant to provisions of Section 148 of the Act the Board of Directors on therecommendation of the Audit Committee reappointed M/s. Ketki D. Visariya & Co. CostAccountant as Cost Auditor of the Company for the financial year 2018-19 at aremuneration of Rs. 200000 /- plus applicable taxes and out of pocket expenses. Howevercost audit is not conducted due to nonpayment of fees to the cost auditor since last threeyears.

INTERNAL FINANCIAL CONTROLS

During the year under review proper systems for internal financial control could notbe followed due to irregularities in payment of fees to Internal Auditors M/s. Chokshi& Chokshi LLP Chartered Accountants. The effectiveness of the internal controls iscontinuously reviewed by the Audit Committee. The internal control system is supplementedby an extensive programme of internal external audits and periodic review by themanagement.

Main objective of Internal Audit is to provide the Audit Committee an independentobjective and reasonable assurance of the adequacy and effective operation of Company'srisk management internal control and governance processes.

On the basis of its deliberations on the internal control systems and internal auditsthe Audit Committee makes recommendations to the Board.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the ResolutionProfessional has appointed Mr. Mayank Padiya Practicing Company Secretary to conductSecretarial Audit of the Company for the financial year 2018-19. The report of theSecretarial Auditor is annexed to this report as Annexure - C.

Management's para wise reply to Secretarial Auditor'squalification/remarks/reservations:

1. After the term of Mr. Ajit Kulkarni and Mr. Sharad Deshpande as Managing Directorand Whole Time Director respectively expired on March 2018 position of the ManagerialPersonnel was vacant due to precarious financial condition of the Company. Further due todisqualification of existing directors on account of default in repayment of publicdeposits the same directors could not be reappointed for managerial position. In themeantime the Corporate Insolvency Resolution Process of the Company commenced w.e.f.01/02/2019 and in view of the same the Resolution Professional has taken over charge ofthe management/Board of Directors of the Company in terms of the provisions of the Codeand the Board is suspended.

2. Due to delay in payment of salaries no new Company Secretary was willing to jointhe Company. In view of the same the position of the CS was vacant.

3. During the Financial Year 2017-18 four Independent Directors of the Company resignedfrom their post and only one independent director left in the Company. As stated in paraone herein powers of the Board of Directors are suspended.

4. Powers of the Board of Directors is suspended w.e.f. 01.02.2019 on account of CIRP.In view of the same Company is managed by the Resolution Professional. Further as perthe provisions of the Code all the claims regarding outstanding debt against the Companyshall lay before the Resolution Professional during the CIRP.

5. The Cost Auditor is not paid any fees during the FY 2018-19. Further there areprocedural overlap in his appointment.

6. Statutory Registers if any pending to be updated will be prepared and updated.

7. Rely of the management is same as stated in para 5 herein.

8. There are no business/activities in the foreign subsidiaries. Further theConsultants/Auditors of these foreign subsidiaries are not paid since many years. In viewof the same APR returns with RBI were not filed.

9. With regard to point 9 of the Secretarial Audit Report it is humbly submitted thatthese forms are not filed due various reasons such as disqualification of directorsnon-availability of data due to nonpayment to RTA or oversight etc.

10. With regard point 10 no comments are required and further the since the Companyis into CIRP all the powers of the Board of Directors are now being exercised by the RPw.e.f. 01.02.2019.

11. With regard point 11 reply of the management is same as stated in para 9 herein.

12. Minutes if any pending will be updated in consultation with the suspended Boardof Directors.

13. There is no official communication from the Registrar after search.

14. The Company has complied with the provisions of the Listing Regulations in bestpossible manner.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company does not own any manufacturing facility. The business activities of yourCompany are not energy intensive. However your Company is committed to take requiredmeasures to reduce energy consumption by the purchase of energy efficient constructionequipment implementation of energy efficient lightings. The specific details as per Rule8(3) are provided under Annexure - D.

PERSONNEL

Disclosure with respect to the remuneration of Directors and Employees in accordancewith the provisions of Section 197 of the Act read with rule 5(1) & (2) the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of thisReport as Annexure - E.

CORPORATE SOCIAL RESPONSIBILITY

The Company is a socially conscious organisation and assigns tremendous value inserving the society at large. We appreciate our position of responsibility for sharing thebenefits with those less fortunate in society and their upliftment.

The Board has constituted a CSR Committee which has recommended to the Board aCorporate Social Responsibility Policy (CSR Policy) indicating the activities to beundertaken by the Company. The Corporate Social Responsibility policy has been devised inaccordance with Section 135 of Act. The CSR policy of the Company is available on thewebsite of the Company www.pratibhagroup.com. Since company has incurred losses during theyear 2016-17 2017-18 and 2018-19 and due to liquidity crunch the Company could not spendmoney on CSR activities. The annual report on CSR activities is set out as Annexure - Fto this report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2018-19 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Act read with Companies(Specification of Definitions Details) Rules 2014 in the ordinary course of business andat arm's length basis.

Since all the related party transactions are carried out at arm's length basis in theordinary course of business the Company do not have any particulars to report in FormAOC- 2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014.

However the disclosure of transactions with related party for the year as perAccounting Standard -18 Related Party Disclosures is given in Notes to the Balance Sheetas on 31st March 2019.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://www.pratibhagroup.com/pratibha_new/pages/PDFs/ PIL_RPT.pdf.

PARTICULARS OF LOANS INVESTMENTS GUARANTEES UNDER SECTION 186

The details of investment made during the year under review (including previous years)are disclosed under Notes of the standalone financial statements of the Company.

The Company is engaged in providing infrastructural facilities and therefore isexempted under sub-section 11 of Section 186 of the Act from the application of provisionsof that Section. As such the requirement to provide the details of a loan guarantee orsecurity is not applicable to the Company.

ANNUAL EVALUATION OF BOARD

In terms of provisions of the Act read with Rules issued thereunder and SEBI LODRRegulations the Nomination and Remuneration Committee formulated the criteria forevaluating the Board of Directors its Committees and individual Directors. During theyear under review evaluation of board was not conducted.

CORPORATE GOVERNANCE

As per the provisions of SEBI LODR Regulations a Corporate Governance Report isincluded in the Annual Report as

Annexure - G.

PREVENTION OF SEXUAL HARRASSMENT AT WORK PLACE

In line with the provisions of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with rules made thereunder your Company hasconstituted Internal Complaints Committee which is responsible for redressal of complaintsrelated to sexual harassment. During the year under review there were no complaintspertaining to sexual harassment.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism to facilitate reporting of any instancesof fraud unethical conduct and mismanagement if any vide Whistle Blower Policy which isin compliance with the provisions of Section 177 (10) of the Act and SEBI LODRRegulations.

The policy also provides for adequate safeguards against victimization of persons whouse such mechanism and makes provision for direct access to the Chairman of the AuditCommittee in all cases. The Whistle Blower Policy of the Company is available on thewebsite of the Company http://www.pratibhagroup.com/pratibha_new/pages/PDFs/WHISTLE_BLOWER_POLICY_PIL_.pdf.

EMPLOYEE RELATIONSHIP

The Company due to financial crunch the Company could not make payments to theemployees on time. However staff and other employees through out the year gave valuablesupport to the company by giving uninterrupted service to the company. Management isthankful to them for such gesture and wishes to place on record its sincere appreciationof the efforts put in by the Company's workers staff and executives for achieving resultsunder demanding circumstances.

OTHER DISCLOSURES

- During the year under review Corporate Insolvency Resolution Process ("CIRProcess") has been initiated for the Company in accordance with the provisions of theInsolvency and Bankruptcy Code 2016 pursuant to order dated February 01 2019 of theHon'ble National Company Law Tribunal - Mumbai Bench.

- Material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year and the date of this Report:

As on the date of signing of this report CIRP Period is expired and accordingly theRP has filed an application before the Hon'ble National Company Law Tribunal - MumbaiBench for liquidation of the Company as going concern which is pending to be decided bythe Hon'ble Bench.

- The Company has not issued any shares or options for subscription of shares by itsemployees under any employee stock option scheme or any other scheme.

- None of the Directors received any remuneration or commission from any of thesubsidiaries.

- The Company has not issued any equity shares with differential voting rights.

- During the year under review no instances of fraud were reported to the AuditCommittee/Board of Directors by Statutory Auditors Secretarial Auditors Cost Auditors orInternal Auditors.

SECRETARIAL STANDARDS

During the period under review the Company has tried to complied with the applicableSecretarial Standards issued by The Institute of Company Secretaries of India.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thanks the Banks Financial InstitutionsCentral and State Governments Various Statutory Authorities Customers SuppliersEmployees and Business Associates for their continued co-operation and support to theCompany. Your Directors appreciate and value the trust reposed and faith shown by everyshareholders of the Company.

By the Order of Resolution Professional

Ajit Kulkarni

Chairman and Director

Date: 09th January 2019

Place: Mumbai

Annexure B - to Directors' Report

Statement of Impact of Audit Qualifications (for audit report with modified opinion)submitted along-with Annual Audited Standalone Financial Results for 31st March 2019

(Rs. In crores)

I. Sr. No. Particulars Audited Figures (as reported before adjusting for qualifications) Adjusted Figures (audited figures after adjusting for qualifications)
1 Turnover / Total income 369.66 369.66
2 Total Expenditure 1958.53 1958.53
3 Net Profit/(Loss) (1588.87) (1588.87)
4 Earnings Per Share (66.59) (66.59)
5 Total Assets 2710.96 2710.96
6 Total Liabilities 2710.96 2710.96
7 Net Worth (4193.64) (4193.64)
8 Any other financial item(s) (as felt appropriate by the management)

II. Audit Qualifications:

Audit Qualification: 1

a. Details of Audit Qualification:

The company has accumulated losses of Rs. 4908.76 Crores and its net worth is fullyeroded. It has incurred net loss during the year ended March 31 2019 amounting to Rs.1588.87 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 Mumbai Bench and ResolutionProfessional ("RP") was appointed vide order dated March 14 2019. Till the dateof signing of Statement no resolution plan had been approved. Further application forliquidation of the Company has been filed with the NCLT. All these indicate a materialuncertainty that may cast significant doubt upon the Company's ability to continue as aGoing Concern. However the standalone financial results are prepared on a going concernbasis.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing Repetitive since Financial Year 2017-18

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

No

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Auditor's remarks are self-explanatory. Hence do not require any further explanation.

iii. Auditors' Comments on (i) or (ii) above:

Not Required

Audit Qualification: 2

a. Details of Audit Qualification:

Inventory of Work in Progress (WIP) includes certain contractual claim amounting toRs.0 310.60 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 Crores Inventories are overstatedand accumulated losses are understated in the standalone financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Repetitive since Financial year 2015-16

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

The Company has prepared the claims based on contractual terms which have beensubmitted to the clients. Further the Company is in process of submitting pending claimswith the clients. The Company is hopeful of clients approval in due course of time.

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Not Applicable

iii. Auditors' Comments on (i) or (ii) above:

Not Applicable

Audit Qualification: 3

a. Details of Audit Qualification:

The management has not provided us with the detailed working of Construction Work inProgress (WIP) Cost to Completion and consequent profitability and/or losses on projectswhich are pending execution. In absence of these details it is not possible for us toascertain whether the Construction WIP of Rs. 5.63 Crores has been valued and statedcorrectly or not. The consequential impact if any on the standalone financial results istherefore not ascertainable.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since Financial year 2017-18

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Since all the balance contracts are on back to back basis with 2 percent averagemargin question of cost to completion and consequent profitability/ and or losses onprojects does not arise. Hence it will not have any impact.

ii. If Management is unable to estimate the impact reasons for the same:

Not applicable

iii. Auditors' Comments on (i) or (ii) above:

In case of Back to back projects there is no question of having any Work in Progressas expenses are recognised along with revenue. Further even if the projects are given onback to back basis as per the requirement of applicable Ind AS it is mandatory toprepare Cost to complete to arrive at project profitability and in case of prossible lossmaking provision for the same. Without proper estimation for cost to complete andestimated profitability it is difficult to arrive at correct working of WIP.

Audit Qualification: 4

a. Details of Audit Qualification:

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 results is not ascertainable.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/since howlong continuing

Repetitive since Financial year 2017-18.

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

The company is mainly working for government or semi government organisation wherethere is no practise of giving any balance confirmation certificate. There will not be anyimpact on financial statement.

iii. Auditors' Comments on (i) or (ii) above:

None of the balance confirmation is available with respect to Trade ReceivablePayable Loans & Advances given and Deposits. Without balance confirmation it isdifficult to quantify the impact on financial statements.

Audit Qualification: 5

a. Details of Audit Qualification:

As per the bank loan statements made available to us by the management the banks havecharged Rs. 25.55 Crores on account of interest and other charges for the period February01 2019 to March 31 2019. However the company has not made provision for such interestand charges due to commencement of CIRP period under IBC. To that extent financeexpenses loan liability loss for the year and accumulated losses are understated.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

First Time

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

The impact of audit qualification is quantified by the Auditor. The remarks of theAuditor is self explanatory and does not require further comments of the management.

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Not Applicable

iii. Auditors' Comments on (i) or (ii) above:

Not Applicable

Audit Qualification: 6

a. Details of Audit Qualification:

Certain loan accounts of company having aggregate balance of Rs. 186.61 Crores are notreconciled with their respective bank statements which are showing aggregate balance ofRs. 58.19 Crores for reasons other than Interest & Other charges. Thus loan balancesof the company are overstated by Rs. 128.42 Crores. Also the current accounts have longstanding unreconciled balance aggregating to Rs. 2.68 Crores. To the extent of Rs. 2.68Crores bank balances are overstated. In absence of detailed reconciliation statement wecannot ascertain the overall impact on standalone financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Appeared for the first time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Adit Qualification(s) where the impact is not quantified by the auditor:

i. Mangement's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Due to unavailability of detailed information in bank statement the Company was notable to make necessary entries in books of accounts in respect of the Bank Loan acocunts.

iii. Auditors' Comments on (i) or (ii) above:

Without bank reconciliation statement it is not possible to ascertain overall impacton financial statements. The management should immediately reconcile book balance withbalance in bank statements which are available with them

Audit Qualification: 7

a. Details of Audit Qualification:

Many loan accounts having aggregate balance of Rs. 801.43 Crores and current accountshaving aggregate balance of Rs. 0.53 Crores are not confirmed due to non-availability ofstatement / confirmation from respective banks. In absence of sufficient appropriate auditevidence we are unable to determine any possible impact thereof on standalone financialresults.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

First Time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Company had requested for balance confirmations from the Banks however the samewere not provided by the Banks during the audit period. Since the Books of Accounts of theCompany are maintained properly this audit qualification will not have any impact on theFinancial Statement of the Company.

iii. Auditors' Comments on (i) or (ii) above:

Without bank statement and balance confirmation from respective Banks it is notpossible to ascertain overall impact on financial statements

Audit Qualification: 8

a. Details of Audit Qualification:

In the reconciliation statement of various bank accounts there are many entriesrelating to Receipts and Payments having aggregated value of Rs. 7.15 Crores and Rs. 5.72Crores respectively which are pending to be cleared since long. To the extent of Rs.1.43 Crores the bank balance is overstated. In absence of complete details we cannotascertain the overall impact on standalone financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the first time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Company will take corrective measures to reconcile the bank balances. Afterreconciliation there will not be any mismatch.

iii. Auditors' Comments on (i) or (ii) above:

The management should immediately reconcile book balance with balance in bankstatements which are available with them

Audit Qualification: 9

a. Details of Audit Qualification:

The company has unconfirmed balances of Fixed Deposit with Bank of Baroda amounting toRs. 5.17 Crores as at March 31 2019. In absence of balance confirmation from the bank andother entities financial impact on standalone financial results is not ascertainable.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

First Time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Company had requested for balance confirmations from the Banks however the samewere not provided by the Banks during the audit period. Since the Books of Accounts of theCompany are maintained properly this audit qualification will not have any impact on theFinancial Statement/results of the Company.

iii. Auditors' Comments on (i) or (ii) above

Without bank statement and balance confirmation from respective Banks it is notpossible to ascertain overall impact on financial statements/results.

Audit Qualification: 10

a. Details of Audit Qualification:

The company has given loans and advances to related parties amounting to Rs. 957.76Crores and received loans and advances from related parties amounting to Rs. 301.18Crores. As per the information given by the management all these related parties havemade substantial losses and their net worth has been fully eroded. However the companyhas not made provision for possible loss on such loans and advances.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

First Time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Erstwhile management before the appointment of the RP was of the view that thisloans/advance would be recovered from the Related Parties regardless of current losses. Inview of the same no provisions were made.

iii. Auditors' Comments on (i) or (ii) above

Provision for expected loss should be made as the networth of all related parties hasfully eroded.

Audit Qualification: 11

a. Details of Audit Qualification:

The company has not provided audited financial statements of its wholly ownedsubsidiary M/s. Pratibha Holdings (Singapore) Pte. Ltd. In absence of these FinancialStatements we cannot comment on any requirement for provision for diminution in value ofinvestment.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Appearing since FY 2017-18

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

No.

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not applicable

ii. If management is unable to estimate the impact reasons for the same:

There is no activities/business in the M/s. Pratibha Holdings (Singapore) Pte. Ltd.Since Pratibha Industries Limited was under financial stress from many years payment toauditors of the said subsidiary was not made and due to non-payment the Auditor has notconducted audit. Further the accounts are maintained by the holding company availabledetails are provided to the Auditor.

iii. Auditors' Comments on (i) or (ii) above

Without audited financial statements any impact on consolidated financial statementcan not be ascertained.

Audit Qualification: 12

a. Details of Audit Qualification:

The Company has not made provision for impairment against Investment of Rs. 0.01 Crorein its subsidiary M/s. Bhopal Sanchi Tollways Private Limited. Its Concession Agreementhas been terminated by NHAI. As informed to us the subsidiary company has lodged claimand the matter is under arbitration.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appearing since FY 2017-18

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Arbitrator has passed an award in the arbitration matter on 30th November 2018. Thesaid award is challenged by M/s. Bhopal Sanchi Tollways Private Limited u/s 34 of theArbitration Act. Hence provision for impairment of the investment is not made by theCompany.

iii. Auditors' Comments on (i) or (ii) above

The claim amount is dependent upon the outcome of arbitration. Hence until then theamount cant be ascertained

Audit Qualification: 13

a. Details of Audit Qualification:

There are many statutory dues amounting to Rs. 129.77 Crores which are pending to bedeposited with appropriate government authorities. The company has not made provision forinterest on these dues on account of delay in depositing them. The management is of theopinion that since the matter in under CIRP there will not be any possibility of paymentof such interest. Since the management has not estimated overall liability on account ofinterest financial impact on standalone financial results is not ascertainable.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Repetitive since FY 2015-16

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

No

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Since the Company is under CIRP there will not be any possibility of payment of suchinterest and hence provisions were not made.

iii. Auditors' Comments on (i) or (ii) above

Provision for interest should be made irrespective of CIRP period. Since outcome of theCIRP is known only after its completion it cant be assumed that there will not be anyliability on account of interest on statutory dues.

Audit Qualification: 14

a. Details of Audit Qualification:

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.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Appeared for the First time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

No

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Company is having many sites spread over the different states of India where theaccounts are maintained at site level. As the Company was facing fund crisis manyemployees left the Company including site in charge. In view of the high employeeattrition level no. of sites and fund crisis there might be some procedural lapses infollowing IND AS. In this back drop the possible impact of the same is not identifiableby the Company for the reporting period.

iii. Auditors' Comments on (i) or (ii) above

Adoption of IND AS is mandatory and hence the management should analyse impact onfinancial statements on its adoption.

Audit Qualification: 15

a. Details of Audit Qualification:

During the year the Company has unilaterally written back certain liabilitiesamounting to Rs. 48.66 Crores. The management of the Company is of the opinion that basedon their analysis of balances and due to various reasons these balances were not payableand hence written back. To that extent the liabilities current year's loss andaccumulated losses are understated.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the first time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

This audit qualification remark of the Auditor is self-explanatory and hence do notrequire further comments.

iii. Auditors' Comments on (i) or (ii) above

Not required

Audit Qualification: 16

a. Details of Audit Qualification:

The company has maintained Fixed asset register however locations of assets have notbeen updated properly.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since FY 2015-16

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not quantified

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The company being EPC company majority of assets are located at various work siteswhere these assets are updated on going concern basis.

iii. Auditors' Comments on (i) or (ii) above

Maintenance of updated Fixed Asset Register is mandatory under Companies Act 2013.

Audit Qualification: 17

a. Details of Audit Qualification:

For the Property Plant & Equipment having net written down value of Rs. 376.24Crores as at the balance sheet date the management had conducted physical verificationat few locations. In the physical verification assets having written down value of Rs.112.00 Crores have been verified. As per the explanation and information provided nophysical verification could be carried out for the balance assets having written downvalue of Rs. 264.24 Crores due to such assets being either under client custody seizedby vendors / subcontractors or such assets being available at sites with no access to thecompany. Based on such verification and management's own assessment for balance locationsthe company has written off assets having aggregate written down value of Rs. 69.11 Croresduring the year. No details have been provided for arriving at the management assessmentfor the location not physically verified. In absence of these details we cannot ascertainthe accuracy of the amount written off.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion:

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the first time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Usually in any EPC (Engineering Procurement Construction) project at the completionstage most of the assets were not depreciated fully or not useable. Due to this assetswere not depreciated fully and not in condition to use or transfer at any other runningproject. In our case all such assets are writen off .

iii. Auditors' Comments on (i) or (ii) above

There are no documented records to ascertain the condition of the asset and itsusability.

Audit Qualification: 18

a. Details of Audit Qualification:

The company has not done impairment testing for the Property Plant and Equipment notphysically verified. In view of the limited information provided to us by the managementwe cannot comment on the requirement of the impairment for these assets and itsconsequential impact on the standalone financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

NA

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

ii. If management is unable to estimate the impact reasons for the same:

The Company being into EPC business main assets are machineries lying and being atsites/ project places. In view of the same it was not possible to do impairment testingor physical verification of such assets for the reporting period.

iii. Auditors' Comments on (i) or (ii) above

The company should conduct physical verification of all the assets and ascertain therequirement of impairment. Without conducting physical verification it is not possible toknow the exact condition of assets as the company now don't have manpower on each of theproject sites where the assets are located.

Audit Qualification: 19

a. Details of Audit Qualification:

The company has not made Provision for Employee Benefits in accordance with Ind AS 19.The management is in opinion that since the matter is under CIRP and also majority of theemployees have already left the company there will be no additional liability on accountof employee benefits. In absence of valuation report we cannot comment on the impact onstandalone financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

NA

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

NA

ii. If management is unable to estimate the impact reasons for the same:

This audit qualification is self-explanatory and hence does not require furthercomments.

iii. Auditors' Comments on (i) or (ii) above

NA

Audit Qualification: 20

a. Details of Audit Qualification:

The foreign currency balances for foreign vendors having credit balance and foradvances paid to foreign vendors aggregating to Rs. 4.50 Crores and Rs. 1.20 Croresrespectively as at March 31 2019 could not be ascertained

due to improper accounting. In the absence of complete details their closing foreigncurrency balances could not be translated at the rate as on the balance sheet as requiredunder IND AS 21 and consequential impact on standalone financial results could not beascertained.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

First time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

NA

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

There is lack of accounting staff as many have left the company However the companywill put its efforts in next financial year to regularise the accounts by passingnecessary entries required in IND AS 21.

iii. Auditors' Comments on (i) or (ii) above

NIL

Audit Qualification: 21

a. Details of Audit Qualification:

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

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

First time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

The Company will try to file pending Service Tax and Excise Returns so as to claimcredits.

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Not Applicable

iii. Auditors' Comments on (i) or (ii) above

Not Applicable

Audit Qualification: 22

a. Details of Audit Qualification:

During the financial year 2017-18 four independent directors of company had resignedfrom its Board and no new appointments have been made during the financial year 2018-19.As a result its composition of Board of Directors Audit Committee Nomination &Remuneration Committee and Stakeholders Relationship Committee were not in compliance withthe provisions of Section 149(4) Section 177 & Section 178 respectively.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Repetitive since FY 2017-18.

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Company is into Insolvency Resolution Process w.e.f. 01.02.2019. Pursuant to whichpowers of Board of Directors of the Company have been suspended and the same is vestedwith Mr. Anil Mehta – Resolution Professional. As such composition of Board ofDirectors and other committee will not be applicable to the Company.

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 23

a. Details of Audit Qualification:

As per the requirement of the order passed by Company Law Board under section 73 (3)of the Companies Act 2013 and section 74 (3) of the Act the company has failed to repayPublic Deposits amounting to Rs. 18.48 Crores and interest thereon amounting to Rs. 12.10Crores within the stipulated time.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Repetitive since FY 2015-16

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Due to precarious financial condition of the Company it was neither able to makepayment to the Public Depositors nor any other creditors or statutory dues. Due to suchfinancial distress the Company is under Corporate Insolvency Resolution Process w.e.f.01.02.2019.

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 24

a. Details of Audit Qualification:

The Company has not maintained detailed Party wise outstanding of Public Deposits andthe provision for penal interest has been made on estimated basis. In the absence of partywise details we cannot ascertain the possible impact on standalone financial results dueto short / excess provision for Interest. Further penal interest for the months ofFebruary & March 2019 as required under Rule 17 of Companies (Acceptance of Deposits)Rules 2014 has not been provided due to the commencement of CIRP period under IBC.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

First Time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Company has maintained register of public deposits containing name addressprincipal amount outstanding and other relevant details. Other than the register of publicdeposit this audit qualification is self-explanatory and hence do not require furtherclarification.

iii. Auditors' Comments on (i) or (ii) above:

No such register with party wise details was produced during audit.

Audit Qualification: 25

a. Details of Audit Qualification:

As required under the provisions of Section 148 of the Companies Act 2013 read withRule 4 of the Companies (Cost Records and Audit) Rules 2014 the cost audit has not beenconducted of company's records.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Repetitive since FY 2017-18

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Due to non-payment to Cost Auditors Cost Auditors have not conducted the Audit.

As per the management's view this will not have any impact on financial statement ofthe Company.

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 26

a. Details of Audit Qualification:

As required under the provisions of Section 138 of the Companies Act 2013 read withRule 13 of the Companies (Accounts) Rules 2014 the Internal Audit of the functions andactivities of the company has not been conducted for the year ended March 31 2019.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification: whether appeared for the first time/repetitive/sincehow long continuing

Appearing for the first time

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Due to non-payment to Internal Auditor Internal Auditors have not conducted the Audit.

As per the management's view this will not have any impact on financialstatement/results of the Company.

iii. Auditors' Comments on (i) or (ii) above:

NIL

For Ramanand & Associates For Pratibha Industries Limited
Chartered Accountants
ICAI Firm Regn No.: 117776W Ajit B Kulkarni K H Sethuraman
Ramanand Gupta Chairman & Director Chief Financial Officer
Managing Partner DIN - 00220578
M No: 103975 Taken On Record
Anil Mehta
Place : Mumbai Resolution Professional IP Registration
Date : 06th December 2019 IBBI/IPA-001/IP-P00749/2017-2018/11282

Annexure B - to Directors' Report

Statement of Impact of Audit Qualifications (for audit report with modified opinion)submitted along-with Annual Audited Consolidated Financial Results for 31st March 2019

(Rs. In crores)

I. Sr. No. Particulars Audited Figures (as reported before adjusting for qualifications) Adjusted Figures (audited figures after adjusting for qualifications)
1 Turnover / Total income 440.32 440.32
2 Total Expenditure 2010.26 2010.26
3 Net Profit/(Loss) (1616.52) (1616.52)
4 Earnings Per Share (67.75) (67.75)
5 Total Assets 3085.72 3085.72
6 Total Liabilities 3085.72 3085.72
7 Net Worth (4336.71) (4336.71)
8 Any other financial item(s) (as felt appropriate by the management)

II. Audit Qualifications:

Audit Qualification: 1

a. Details of Audit Qualification:

The Group has accumulated losses of Rs. 5051.89 Crores and its net worth is fullyeroded. It has incurred net loss during the year ended March 31 2019 amounting to Rs.1616.50 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 ofHolding Company's 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.Till the date of signing of Statement no resolution plan had been approved. Furtherapplication for liquidation of the Holding Company has been filed with the NCLT. All theseindicate a material uncertainty that may cast significant doubt upon the Groups' abilityto continue as a Going Concern. However the consolidated financial results are preparedon a going concern basis.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since Financial Year 2017-18

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

No

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Auditor's remarks are self-explanatory. Hence do not require any further explanation.

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 2

a. Details of Audit Qualification:

Inventory of Work in Progress (WIP) of the Holding Company and of the JVs' includescertain contractual claims amounting to Rs. 310.60 Crores and Rs. 1003.36 Croresrespectively. These amounts have been ascertained by their respective managements based ontheir estimates. Out of these contractual claims claims of the Holding Company and of theJVs' as reported by their auditors amounting to Rs. 259.33 Crores and Rs. 1003.36Crores respectively

are either 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 clients. To the extent of Rs. 1262.70 Crores Inventoriesare overstated and accumulated losses are understated in the consolidated financialresults.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since Financial year 2015-16

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

The Group has prepared the claims based on contractual terms which have been submittedto the clients. Further the Group is in process of submitting pending claims with theclients. The Group is hopeful of clients' approval in due course of time.

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Not Applicable

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 3

a. Details of Audit Qualification:

The management of the Holding Company and a JV has not provided us and to the auditorof that JV as reported in the JV's audit report with the detailed working ofConstruction Work in Progress (WIP) Cost to Completion and consequent profitability and /or losses on projects which are pending execution. In absence of these details it is notpossible for us and for the JVs' auditor to ascertain whether the Construction WIP of Rs.8.71 Crores has been valued and stated correctly or not. The consequential impact if anyon the consolidated financial results is therefore not ascertainable.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since Financial year 2017-18

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Since all the balance contracts are on back to back basis with 2 percent averagemargin question of cost to completion and consequent profitability/ and or losses onprojects does not arise. Hence it will not have any impact.

ii. If Management is unable to estimate the impact reasons for the same: Notapplicable

iii. Auditors' Comments on (i) or (ii) above:

In case of back to back projects there is no question of having any work in progressas expenses are recognised along with revenue. Further even if the projects are given onback to back basis as per the requirement of applicable Ind AS it is mandatory toprepare cost to complete to arrive at project profitability and in case of possible lossmaking provision for the same. Without proper estimation for cost to complete andestimated profitability it is difficult to arrive at correct working of WIP.

Audit Qualification: 4

a. Details of Audit Qualification:

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 results is not ascertainable.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since Financial year 2017-18.

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

The company is mainly working for government or semi government organisation wherethere is no practise of giving any balance confirmation certificate. There will not be anyimpact on financial statement/Financial Results

iii. Auditors' Comments on (i) or (ii) above:

None of the balance confirmation is available with respect to Trade ReceivablePayable Loans & Advances given and Deposits. Without balance confirmation it isdifficult to quantify the impact on financial statements.

Audit Qualification: 5

a. Details of Audit Qualification:

As per the bank loan statements made available to us and to the auditor of JVs by therespective management of the Holding Company and such JVs the banks have charged Rs.25.55 Crores and Rs. 3.40 Crores respectively on account of interest and other chargesfor the period February 01 2019 to March 31 2019. However the Holding Company and suchJVs as reported in the JVs' audit reports have not made provision for such interest andcharges due to commencement of CIRP period under IBC. To the extent of Rs.28.95 Croresfinance expenses loan liability loss for the year and accumulated losses of Group areunderstated.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First Time

d. For Audit Qualification(s) where the impact is quantified by the AuditorsManagement's Views:

The impact of audit qualification is quantified by the Auditor. The remarks of theAuditor are self-explanatory and do not require further comments of the management.

e. For Audit Qualification(s) where the impact is not quantified by the Auditors:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Not Applicable

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 6

a. Details of Audit Qualification:

Certain loan accounts of Holding Company having aggregate balances of Rs. 186.61 Croresare not reconciled with their respective bank statements which are showing aggregatebalance of Rs. 58.19 Crores for reasons other than Interest & Other charges. Thusloan balances of the Holding Company are overstated by Rs.128.42 Crores. Also the currentaccounts of the Holding Company have long standing unreconciled balance aggregating toRs.2.68 Crores. To the extent of Rs. 2.68 Crores bank balances are overstated. In absenceof detailed reconciliation statement we cannot ascertain the overall impact onconsolidated financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the first time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Due to unavailability of detailed information in bank statement the Company was notable to make necessary entries in books of accounts in respect of the Bank Loan accounts.

iii. Auditors' Comments on (i) or (ii) above:

Without bank reconciliation statement it is not possible to ascertain overall impacton financial statements. The management should immediately reconcile book balances withbalances in bank statements which are available with them.

Audit Qualification: 7

a. Details of Audit Qualification:

Many loan accounts of the Holding Company having aggregate balance of Rs. 801.43Crores and current accounts of the Holding Company and of the JVs' as reported in theJVs' audit reports having aggregate balance of Rs. 0.53 Crores and Rs. 0.33 Croresrespectively are not confirmed due to non-availability of statement / confirmation fromrespective Banks. In absence of sufficient appropriate audit evidence we are unable todetermine any possible impact thereof on consolidated financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First Time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Company had requested for balance confirmations from the Banks however the samewere not provided by the Banks during the audit period. Since the Books of Accounts of theCompany are maintained properly this audit qualification will not have any impact on theFinancial Statement of the Company.

iii. Auditors' Comments on (i) or (ii) above:

Without bank statement and balance confirmation from respective banks it is notpossible to ascertain overall impact on financial statements.

Audit Qualification: 8

a. Details of Audit Qualification:

In the reconciliation statement of various bank accounts of the Holding Company thereare many entries relating to Receipts and Payments having aggregated value of Rs. 7.15Crores and Rs. 5.72 Crores respectively which are pending to be cleared since long. Tothe extent of Rs. 1.43 Crores the bank balance is overstated. In absence of completedetails we cannot ascertain the overall impact on consolidated financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the first time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable.

ii. If Management is unable to estimate the impact reasons for the same:

The Company will take corrective measures to reconcile the bank balances. Afterreconciliation there will not be any mismatch.

iii. Auditors' Comments on (i) or (ii) above:

The management should immediately reconcile book balance with balance in bankstatements which are available with them.

Audit Qualification: 9

a. Details of Audit Qualification:

The Holding Company has an unconfirmed balance of Fixed Deposit with Bank of Barodaamounting to Rs. 5.17 Crores as at March 31 2019. In absence of balance confirmation fromthe bank financial impact on consolidated financial results is not ascertainable.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First Time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

The Company had requested for balance confirmations from the Banks however the samewere not provided by the Banks during the audit period. Since the Books of Accounts of theCompany are maintained properly this audit qualification will not have any impact on theFinancial Statement/results of the Company.

iii. Auditors' Comments on (i) or (ii) above

Without bank statement and balance confirmation from respective Banks it is notpossible to ascertain overall impact on financial statements.

Audit Qualification: 10

a. Details of Audit Qualification:

The Group has given loans and advances to related parties amounting to Rs. 120.27Crores and received loans and advances from related parties amounting to Rs. 15.31 Crores.As per the information given by the Holding Company's management and as reported in theJVs' audit reports all these related parties have made substantial losses and their networth has been fully eroded. However the Group has not made provision for possible losson such loans and advances.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First Time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Erstwhile management before the appointment of the RP was of the view that thisloans/advance would be recovered from the Related Parties regardless of current losses. Inview of the same no provisions were made.

iii. Auditors' Comments on (i) or (ii) above

Provision for expected loss should be made as the net worth of all related parties hasfully eroded.

Audit Qualification: 11

a. Details of Audit Qualification:

The Holding company has not provided audited financial statements of its wholly ownedsubsidiary M/s. Pratibha Holdings (Singapore) Pte. Ltd. In absence of these FinancialStatements we cannot comment on any requirement for provision for diminution in value ofinvestment.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appearing since FY 2017-18

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

No.

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not applicable

ii. If Management is unable to estimate the impact reasons for the same:

There is no activities/business in the M/s. Pratibha Holdings (Singapore) Pte. Ltd.Since Pratibha Industries Limited was under financial stress from many years payment toauditors of the said subsidiary was not made and due to non-payment the Auditor has notconducted audit. Further the accounts are maintained by the holding company and availabledetails are provided to the Auditor.

iii. Auditors' Comments on (i) or (ii) above

Without audited financial statements any impact on consolidated financial statementcan not be ascertained.

Audit Qualification: 12

a. Details of Audit Qualification:

The Holding Company has not made provision for impairment against Investment of Rs.0.01 Crore in its subsidiary M/s. Bhopal Sanchi Tollways Private Limited. Its ConcessionAgreement has been terminated by NHAI. As informed to us the subsidiary company haslodged claim and the matter is under arbitration.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appearing since FY 2017-18

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

The Arbitrator has passed an award in the arbitration matter on 30th November 2018. Thesaid award is challenged by /s. Bhopal Sanchi Tollways Private Limited u/s 34 of theArbitration Act. Hence provision for impairment of the investment is not made by theCompany.

iii. Auditors' Comments on (i) or (ii) above

The claim amount is dependent upon the outcome of arbitration. Hence until then theamount cannot be ascertained

Audit Qualification: 13

a. Details of Audit Qualification:

For the Holding Company and for the JVs' there are many statutory dues amounting toRs. 129.77 Crores and Rs. 13.58 Crores respectively which are pending to be deposited bythe respective entities with appropriate government authorities. The Holding company andthe JVs' as reported by the JVs' auditors have not made provision for interest on thesedues on account of delay in depositing them. Since the management of Holding Company andof the JVs' has not estimated overall liability on account of interest financial impacton consolidated financial results is not ascertainable.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since FY 2015-16

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

No

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Since the Company is under CIRP there will not be any possibility of payment of suchinterest and hence provisions were not made.

iii. Auditors' Comments on (i) or (ii) above

Provision for interest should be made irrespective of CIRP period. Since outcome of theCIRP is known only after its completion it cannot be assumed that there will not be anyliability on account of interest on statutory dues.

Audit Qualification: 14

a. Details of Audit Qualification:

The Holding Company and the JVs' as reported by its' auditors have not providedsufficient appropriate information to evaluate the accuracy of recognition measurementand presentation of revenues and other related balances in view of the applicability ofInd AS 115 "Revenue from Contracts with Customers". The Group has not evaluatedimpact of variable consideration on its revenue as required under IND AS 115.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the First time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

No

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

The Company is having many sites spread over the different states of India where theaccounts are maintained at site level. As the Company was facing fund crisis manyemployees left the Company including site in charge. In view of the high employeeattrition level no. of sites and fund crisis there might be some procedural lapses infollowing IND AS. In this back drop the possible impact of the same is not identifiableby the Company for the reporting period.

iii. Auditors' Comments on (i) or (ii) above

Adoption of IND AS is mandatory and hence the management should analyse impact onfinancial statements on its adoption.

Audit Qualification: 15

a. Details of Audit Qualification:

During the year the Group has unilaterally written back certain liabilities amountingto Rs. 48.78 Crores. The managements of the Company and of the JVs' as reported by its'auditors are of the opinion that based on their analysis of balances and due to variousreasons these balances were not payable and hence written back. To that extent theliabilities current year's loss and accumulated losses are understated in theconsolidated financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the first time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

ii. If Management is unable to estimate the impact reasons for the same:

This audit qualification remark of the Auditor is self-explanatory and hence do notrequire further comments.

iii. Auditors' Comments on (i) or (ii) above

NIL

Audit Qualification: 16

a. Details of Audit Qualification:

The contracts of the JVs have been terminated by their respective clients and theprojects have been assigned to other contractors as reported by the auditors of JVs. Asper the information & explanation given by the management of such JVs there are noliabilities in such projects. However there are certain provision for expensesaggregating to Rs. 38.74 Crores is appearing in Other Financial Liabilities. No detail ofthe provision has been provided to the auditor of such JVs for verification. In absence ofthe details to the extent of amount of the provision the liabilities and accumulatedlosses are overstated.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the first time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

The provisions for expenses were made at the time when the projects were executed bythe Company/JV. It is evident from the ongoing Insolvency Process that the Company wasfacing server financial crisis. Many projects were terminated by the clients due to delayin project completion. As stated earlier the site/project in charges have left theCompany on account of non-payment of salary. In view of the aforesaid facts andcircumstances the provisions made for expenses were not reconciled and appropriateentries in the books were not made.

The Company will reconcile the accounts of the sites and necessary actions will betaken. For this reporting period impact of the same cannot be estimated.

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Not Applicable

iii. Auditors' Comments on (i) or (ii) above

NIL

Audit Qualification: 17

a. Details of Audit Qualification:

The Holding Company has maintained Fixed Asset register. However locations of assetshave not been updated properly.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since FY 2015-16

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not quantified

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

The company being EPC company majority of assets are located at various work siteswhere these asset registers are updated on going concern basis.

iii. Auditors' Comments on (i) or (ii) above

Maintenance of updated Fixed Asset Register is mandatory under Companies Act 2013.

Audit Qualification: 18

a. Details of Audit Qualification:

For the Property Plant & Equipment in the Holding Company having net written downvalue of Rs. 376.24 Crores as at the balance sheet date the management of the HoldingCompany had conducted physical verification at few locations. In the physicalverification assets having written down value of Rs. 112.00 Crores have been verified. Asper the explanation and information provided no physical verification could be carriedout for the balance assets having written down value of Rs. 264.24 Crores due to suchassets being either under client custody seized by vendors / subcontractors or suchassets being available at sites with no access to the company. Based on such verificationand management's own assessment for balance locations the Holding Company has written offassets having aggregate written down value of Rs. 69.11 Crores during the year. No detailshave been provided for arriving at the management's assessment for the location notphysically verified. In absence of these details we cannot ascertain the accuracy of theamount written off.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion:

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appeared for the first time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If Management is unable to estimate the impact reasons for the same:

Usually in any EPC (Engineering Procurement Construction) project at the completionstage most of the assets were not depreciated fully or not useable. Due to this assetswere not depreciated fully and not in condition to use or transfer at any other runningproject. In our case all such assets are written off .

iii. Auditors' Comments on (i) or (ii) above

There are no documented records to ascertain the condition of the asset and itsusability.

Audit Qualification: 19

a. Details of Audit Qualification:

The Holding Company has not done impairment testing for the Property Plant andEquipment not physically verified. In view of the limited information provided to us bythe management of the Holding Company we cannot comment on the requirement of theimpairment for these assets and its consequential impact on the consolidated financialresults.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

NA

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Company being into EPC business main assets are machineries lying and being atsites/ project places. In view of the same it was not possible to do impairment testingor physical verification of such assets for the reporting period.

iii. Auditors' Comments on (i) or (ii) above

The Group should conduct physical verification of all the assets and ascertain therequirement of impairment. Without conducting physical verification it is not possible toknow the exact condition of assets as the Group now don't have manpower on each of theproject sites where the assets are located.

Audit Qualification: 20

a. Details of Audit Qualification:

The Holding Company has not made Provision for Employee Benefits in accordance with IndAS 19. The management of the Holding Company is in opinion that since the matter is underCIRP and also majority of the employees have already left the company there will be noadditional liability on account of employee benefits. In absence of valuation report wecannot comment on the impact on consolidated financial results.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

NA

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

NA

ii. If management is unable to estimate the impact reasons for the same:

This audit qualification is self-explanatory and hence does not require furthercomments.

iii. Auditors' Comments on (i) or (ii) above

NIL

Audit Qualification: 21

a. Details of Audit Qualification:

The foreign currency balances in respect of the Holding Company and of the JVs' forforeign vendors having credit balance aggregating to Rs. 4.50 Crores and Rs. 3.14 Croresrespectively and for advances paid to foreign vendors aggregating to Rs. 1.20 Crores andRs. 7.67 Crores respectively as at March 31 2019 could not be ascertained due toimproper accounting. In the absence of complete details their closing foreign currencybalances could not be translated at the rate as on the balance sheet as required under INDAS 21 and consequential impact on consolidated financial results could not be ascertained.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

NA

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

ii. If management is unable to estimate the impact reasons for the same:

There is lack of accounting staff as many have left the Group However the Group willput its efforts in next financial year to regularise the accounts by passing necessaryentries required in IND AS 21.

iii. Auditors' Comments on (i) or (ii) above

NIL

Audit Qualification: 22

a. Details of Audit Qualification:

The balances with statutory authorities includes credits in respect of the HoldingCompany and of the JVs' aggregating to Rs. 24.44 Crores and Rs. 7.01 Croresrespectively which pertains to the Service Tax and Excise Duty. The Holding Company andthe JVs' as reported in the JVs' audit reports have not filed Service Tax and ExciseReturns since long to claim credits against Service Tax and Excise Duty liabilities. Inabsence of submission of returns the credits cannot be utilized. To this extent theGroup's current assets are overstated and accumulated losses are understated.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

The Company will try to file pending Service Tax and Excise Returns so as to claimcredits.

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Not Applicable.

iii. Auditors' Comments on (i) or (ii) above

NIL

Audit Qualification: 23

a. Details of Audit Qualification:

During the financial year 2017-18 four independent directors of Holding Company hadresigned from its Board and no new appointments have been made during the financial year2018-19. As a result it's composition of Board of Directors Audit Committee Nomination& Remuneration Committee and Stakeholders Relationship Committee was not in compliancewith the provisions of Section 149(4) Section 177 & Section 178 respectively.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since FY 2017-18.

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Holding Company is into Insolvency Resolution Process w.e.f. 01.02.2019. Pursuantto which powers of Board of Directors of the Holding Company have been suspended and thesame is vested with Mr. Anil Mehta – Resolution Professional. As such composition ofBoard of Directors and other committee will not be applicable to the Holding Company.

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 24

a. Details of Audit Qualification:

As per the requirement of the order passed by Company Law Board under section 73 (3)of the Companies Act 2013 and section 74 (3) of the Act the Holding Company has failedto repay Public Deposits amounting to Rs. 18.48 Crores and interest thereon amounting toRs. 12.10 Crores within the stipulated time.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Qualified Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since FY 2015-16

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Due to precarious financial condition of the Holding Company it was neither able tomake payment to the Public Depositors nor any other creditors or statutory dues of theHolding Company. Due to such financial distress the Holding Company is under CorporateInsolvency Resolution Process w.e.f. 01.02.2019.

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 25

a. Details of Audit Qualification:

The Holding Company has not maintained detailed Party wise outstanding of PublicDeposits and the provision for penal interest has been made on estimated basis. In theabsence of party wise details we cannot ascertain the possible impact on consolidatedfinancial results due to short / excess provision for Interest. Further penal interestfor the months of February & March 2019 as required under Rule 17 of Companies(Acceptance of Deposits) Rules 2014 has not been provided by the Holding Company due tothe commencement of CIRP period under IBC.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

First Time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

The Holding Company has maintained register of public deposits containing nameaddress principal amount outstanding and other relevant details. Other than the registerof public deposit this audit qualification is self-explanatory and hence do not requirefurther clarification.

iii. Auditors' Comments on (i) or (ii) above:

No such register with party wise details was produced during audit.

Audit Qualification: 25

a. Details of Audit Qualification:

As required under the provisions of Section 148 of the Companies Act 2013 read withRule 4 of the Companies (Cost Record and Audit) Rules 2014 the cost audit has not beenconducted of Holding Company's records.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Repetitive since FY 2017-18

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Due to non-payment to Cost Auditors Cost Auditors have not conducted the Audit.

As per the management's view this will not have any impact on financial statement ofthe Holding Company.

iii. Auditors' Comments on (i) or (ii) above:

NIL

Audit Qualification: 26

a. Details of Audit Qualification:

As required under the provisions of Section 138 of the Companies Act 2013 read withRule 13 of the Companies (Accounts) Rules 2014 the Internal Audit of the functions andactivities of the Holding Company has not been conducted for the year ended March 312019.

b. Type of Audit Qualification :

Qualified Opinion / Disclaimer of Opinion / Adverse Opinion

Disclaimer of Opinion

c. Frequency of qualification:

whether appeared for the first time/repetitive/since how long continuing

Appearing for the first time

d. For audit Qualification(s) where the impact is quantified by the auditorManagement's Views:

Not Applicable

e. For Audit Qualification(s) where the impact is not quantified by the auditor:

i. Management's estimation on the impact of audit qualification:

Not Applicable

ii. If management is unable to estimate the impact reasons for the same:

Due to non-payment to Internal Auditor Internal Auditors have not conducted the Audit.

As per the management's view this will not have any impact on financial statement ofthe Company.

iii. Auditors' Comments on (i) or (ii) above:

NIL

For Ramanand & Associates For Pratibha Industries Limited
Chartered Accountants
ICAI Firm Regn No.: 117776W Ajit B Kulkarni K H Sethuraman
Ramanand Gupta Chairman & Director Chief Financial Officer
Managing Partner DIN - 00220578
M No: 103975 Taken On Record
Anil Mehta
Place : Mumbai Resolution Professional IP Registration
Date : 06th December 2019 IBBI/IPA-001/IP-P00749/2017-2018/11282

.