To,
The Members
Pratibha Industries Limited
Your Directors/Resolution Professional have pleasure in presenting the 24th Annual
Report together with the financial statements for the financial year ended 31st March,
2019.
FINANCIAL HIGHLIGHTS
The performance of the Company for the financial year ended 31st March, 2019, is
summarized 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 |
1,241.40 |
Total Expenditure |
1958.53 |
3813.92 |
2010.26 |
4062.79 |
Profit/(loss) before Tax |
-1588.87 |
-2803.47 |
-1,569.94 |
-2,821.39 |
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'), the
turnover 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 into
Corporate Insolvency Resolution Process ("CIRP") w.e.f. 01.02.2019, details of
the same is given in the notice of this AGM.
During the year under review, most of the ongoing contracts were given on back to back
basis 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 this
Report.
SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES
The names of companies which are subsidiaries, associates and joint ventures of the
Company are provided under point III of MGT 9. Pursuant to the provisions of Section 129
and other applicable provisions of the Companies Act, 2013 ("the Act") read with
rules framed thereunder, the Company has prepared consolidated financial statements of the
Company and its subsidiaries, associate companies and joint ventures, in accordance with
IND AS-27 on Consolidated Financial Statements read with IND AS-31 on interest in Joint
Ventures and IND AS-28 on Investments in Joint Ventures, and a separate statement
containing the salient features of financial statements of subsidiaries, joint ventures
and associates in Form AOC-1 are attached to the said consolidated financial statement
forming part of the Annual Report.
The business highlights of subsidiaries have been covered in Management Discussion and
Analysis forming part of this Annual Report.
FIXED DEPOSITS
The Company has not invited, accepted and renewed fixed deposits from public/members
during 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 claim
in respect of their outstanding dues before the Resolution Professional.
DIRECTORS
During the financial year under review, Mr. Sharad Deshpande- Director of the Company
resigned 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 29th
December 2018.
MEETINGS OF THE BOARD
The details of meetings of Board and its Committees held during FY 2018-19 and other
prescribed information are provided in the Corporate Governance Report forming part of
this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (5) of the Act, your Directors hereby
affirm that: (a) in the preparation of the annual accounts, the applicable IND AS have
been followed along with proper explanation relating to material departures; (b) the
Directors have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the financial year and of the loss of
the Company for that period; (c) the Directors have taken proper and sufficient care for
the maintenance of adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities; (d) the Directors have prepared the annual accounts on a going
concern basis; (e) the Directors have laid down internal financial controls to be followed
by the Company and that such internal financial controls are adequate and were operating
effectively; and (f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
STATUTORY AUDITORS
M/s. Ramanand & Associates, Chartered Accountants (ICAI Firm Registration Number
117776W) were appointed as the Statutory Auditors of the Company to hold office for a term
of 5 years from the conclusion of the 22nd Annual General Meeting (AGM) held on 29th
September, 2017 until the conclusion of the 27th Annual General Meeting (AGM) of the
Company to be held in the year 2022.
Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th May,
2018, amending section 139 of the Companies Act, 2013, the mandatory requirement for
ratification of appointment of Auditors by the Members at every AGM has been omitted and
hence 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) of
SEBI (LODR) Regulations is enclosed hereto as Annexure B.
COST AUDITORS
Pursuant to provisions of Section 148 of the Act, the Board of Directors on the
recommendation of the Audit Committee, reappointed M/s. Ketki D. Visariya & Co., Cost
Accountant, as Cost Auditor of the Company for the financial year 2018-19 at a
remuneration of Rs. 200,000 /- plus applicable taxes and out of pocket expenses. However,
cost audit is not conducted due to nonpayment of fees to the cost auditor since last three
years.
INTERNAL FINANCIAL CONTROLS
During the year under review, proper systems for internal financial control could not
be followed due to irregularities in payment of fees to Internal Auditors, M/s. Chokshi
& Chokshi LLP, Chartered Accountants. The effectiveness of the internal controls is
continuously reviewed by the Audit Committee. The internal control system is supplemented
by an extensive programme of internal, external audits and periodic review by the
management.
Main objective of Internal Audit is to provide the Audit Committee an independent,
objective and reasonable assurance of the adequacy and effective operation of Company's
risk management, internal control and governance processes.
On the basis of its deliberations on the internal control systems and internal audits,
the 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 Resolution
Professional has appointed Mr. Mayank Padiya, Practicing Company Secretary to conduct
Secretarial Audit of the Company for the financial year 2018-19. The report of the
Secretarial Auditor is annexed to this report as Annexure - C.
Management's para wise reply to Secretarial Auditor's
qualification/remarks/reservations:
1. After the term of Mr. Ajit Kulkarni and Mr. Sharad Deshpande as Managing Director
and Whole Time Director, respectively, expired on March 2018, position of the Managerial
Personnel was vacant due to precarious financial condition of the Company. Further due to
disqualification of existing directors on account of default in repayment of public
deposits, the same directors could not be reappointed for managerial position. In the
meantime, 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 of
the management/Board of Directors of the Company in terms of the provisions of the Code
and the Board is suspended.
2. Due to delay in payment of salaries, no new Company Secretary was willing to join
the 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 resigned
from their post and only one independent director left in the Company. As stated in para
one 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 per
the provisions of the Code, all the claims regarding outstanding debt against the Company
shall lay before the Resolution Professional during the CIRP.
5. The Cost Auditor is not paid any fees during the FY 2018-19. Further, there are
procedural 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, the
Consultants/Auditors of these foreign subsidiaries are not paid since many years. In view
of the same APR returns with RBI were not filed.
9. With regard to point 9 of the Secretarial Audit Report, it is humbly submitted that
these forms are not filed due various reasons such as disqualification of directors,
non-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 Company
is into CIRP, all the powers of the Board of Directors are now being exercised by the RP
w.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 Board
of 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 best
possible manner.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Your Company does not own any manufacturing facility. The business activities of your
Company are not energy intensive. However, your Company is committed to take required
measures to reduce energy consumption by the purchase of energy efficient construction
equipment, implementation of energy efficient lightings. The specific details as per Rule
8(3) are provided under Annexure - D.
PERSONNEL
Disclosure with respect to the remuneration of Directors and Employees in accordance
with 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 this
Report as Annexure - E.
CORPORATE SOCIAL RESPONSIBILITY
The Company is a socially conscious organisation and assigns tremendous value in
serving the society at large. We appreciate our position of responsibility for sharing the
benefits with those less fortunate in society and their upliftment.
The Board has constituted a CSR Committee which has recommended to the Board a
Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be
undertaken by the Company. The Corporate Social Responsibility policy has been devised in
accordance with Section 135 of Act. The CSR policy of the Company is available on the
website of the Company www.pratibhagroup.com. Since company has incurred losses during the
year 2016-17, 2017-18 and 2018-19 and due to liquidity crunch, the Company could not spend
money on CSR activities. The annual report on CSR activities is set out as Annexure - F
to this report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2018-19, your Company has entered into transactions with
related 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 and
at arm's length basis.
Since all the related party transactions are carried out at arm's length basis in the
ordinary course of business, the Company do not have any particulars to report in Form
AOC- 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 per
Accounting Standard -18 Related Party Disclosures is given in Notes to the Balance Sheet
as on 31st March, 2019.
The Policy on materiality of related party transactions and dealing with related party
transactions as approved by the Board may be accessed on the Company's website at the
link: 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 is
exempted under sub-section 11 of Section 186 of the Act from the application of provisions
of that Section. As such, the requirement to provide the details of a loan, guarantee or
security is not applicable to the Company.
ANNUAL EVALUATION OF BOARD
In terms of provisions of the Act read with Rules issued thereunder and SEBI LODR
Regulations, the Nomination and Remuneration Committee formulated the criteria for
evaluating the Board of Directors, its Committees and individual Directors. During the
year under review, evaluation of board was not conducted.
CORPORATE GOVERNANCE
As per the provisions of SEBI LODR Regulations, a Corporate Governance Report is
included 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 (Prevention,
Prohibition & Redressal) Act, 2013 read with rules made thereunder, your Company has
constituted Internal Complaints Committee which is responsible for redressal of complaints
related to sexual harassment. During the year under review, there were no complaints
pertaining to sexual harassment.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism to facilitate reporting of any instances
of fraud, unethical conduct and mismanagement, if any vide Whistle Blower Policy which is
in compliance with the provisions of Section 177 (10) of the Act and SEBI LODR
Regulations.
The policy also provides for adequate safeguards against victimization of persons who
use such mechanism and makes provision for direct access to the Chairman of the Audit
Committee in all cases. The Whistle Blower Policy of the Company is available on the
website 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 the
employees on time. However, staff and other employees, through out the year gave valuable
support to the company by giving uninterrupted service to the company. Management is
thankful to them for such gesture and wishes to place on record its sincere appreciation
of the efforts put in by the Company's workers, staff and executives for achieving results
under demanding circumstances.
OTHER DISCLOSURES
- During the year under review, Corporate Insolvency Resolution Process ("CIR
Process") has been initiated for the Company in accordance with the provisions of the
Insolvency and Bankruptcy Code, 2016 pursuant to order dated February 01, 2019, of the
Hon'ble National Company Law Tribunal - Mumbai Bench.
- Material changes and commitments, affecting the financial position of the Company,
have 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, the
RP has filed an application before the Hon'ble National Company Law Tribunal - Mumbai
Bench for liquidation of the Company as going concern, which is pending to be decided by
the Hon'ble Bench.
- The Company has not issued any shares or options for subscription of shares by its
employees under any employee stock option scheme or any other scheme.
- None of the Directors received any remuneration or commission from any of the
subsidiaries.
- 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 Audit
Committee/Board of Directors by Statutory Auditors, Secretarial Auditors, Cost Auditors or
Internal Auditors.
SECRETARIAL STANDARDS
During the period under review, the Company has tried to complied with the applicable
Secretarial Standards issued by The Institute of Company Secretaries of India.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thanks the Banks, Financial Institutions,
Central and State Governments, Various Statutory Authorities, Customers, Suppliers,
Employees and Business Associates for their continued co-operation and support to the
Company. Your Directors appreciate and value the trust reposed and faith shown by every
shareholders 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 |
(4,193.64) |
(4,193.64) |
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. 4,908.76 Crores and its net worth is fully
eroded. It has incurred net loss during the year ended March 31, 2019 amounting to Rs.
1,588.87 Crores as well as in previous years. It is unable to repay its debts, statutory
obligations and pay salaries apart from other obligations/commitments. The application of
Financial Creditors under section 9 of the Insolvency and Bankruptcy Code (IBC) had been
admitted by Hon'ble National Company Law Tribunal, Mumbai Bench and Resolution
Professional ("RP") was appointed vide order dated March 14, 2019. Till the date
of signing of Statement, no resolution plan had been approved. Further, application for
liquidation of the Company has been filed with the NCLT. All these indicate a material
uncertainty that may cast significant doubt upon the Company's ability to continue as a
Going Concern. However, the standalone financial results are prepared on 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 Auditors,
Management'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 to
Rs.0 310.60 Crores. These amounts have been ascertained by the management based on their
estimates. Out of these contractual claims, claims amounting to Rs. 259.33 Crores, are
either formally submitted but not yet approved by respective clients or no formal
submissions have been made to respective clients. The amounts of these claims are subject
to change post approval
from respective clients. To the extent of Rs. 259.33 Crores, Inventories are overstated
and 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/since
how long continuing
Repetitive since Financial year 2015-16
d. For Audit Qualification(s) where the impact is quantified by the Auditors,
Management's Views:
The Company has prepared the claims based on contractual terms, which have been
submitted to the clients. Further, the Company is in process of submitting pending claims
with 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 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 not possible for us to
ascertain whether the Construction WIP of Rs. 5.63 Crores has been valued and stated
correctly or not. The consequential impact, if any, on the standalone 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 Auditors,
Management'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 average
margin, question of cost to completion and consequent profitability/ and or losses on
projects 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 Progress
as expenses are recognised along with revenue. Further, even if the projects are given on
back to back basis, as per the requirement of applicable Ind AS, it is mandatory to
prepare Cost to complete to arrive at project profitability and in case of prossible loss,
making provision for the same. Without proper estimation for cost to complete and
estimated 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 trade
payables are not received from third parties. These balances are subject to confirmations
and consequent adjustments, if required. In absence of balance confirmations, 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/since how
long continuing
Repetitive since Financial year 2017-18.
d. For Audit Qualification(s) where the impact is quantified by the Auditors,
Management'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 where
there is no practise of giving any balance confirmation certificate. There will not be any
impact on financial statement.
iii. Auditors' Comments on (i) or (ii) above:
None of the balance confirmation is available with respect to Trade Receivable,
Payable, Loans & Advances given and Deposits. Without balance confirmation, it is
difficult 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 have
charged Rs. 25.55 Crores on account of interest and other charges for the period February
01, 2019 to March 31, 2019. However, the company has not made provision for such interest
and charges, due to commencement of CIRP period under IBC. To that extent, finance
expenses, 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/since
how long continuing
First Time
d. For Audit Qualification(s) where the impact is quantified by the Auditors,
Management's Views:
The impact of audit qualification is quantified by the Auditor. The remarks of the
Auditor 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 not
reconciled with their respective bank statements which are showing aggregate balance of
Rs. 58.19 Crores, for reasons other than Interest & Other charges. Thus, loan balances
of the company are overstated by Rs. 128.42 Crores. Also, the current accounts have long
standing unreconciled balance aggregating to Rs. 2.68 Crores. To the extent of Rs. 2.68
Crores, bank balances are overstated. In absence of detailed reconciliation statement, we
cannot 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/since
how long continuing
Appeared for the first time
d. For audit Qualification(s) where the impact is quantified by the auditor,
Management'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 not
able 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 impact
on financial statements. The management should immediately reconcile book balance with
balance 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 accounts
having aggregate balance of Rs. 0.53 Crores are not confirmed due to non-availability of
statement / confirmation from respective banks. In absence of sufficient appropriate audit
evidence, we are unable to determine any possible impact thereof 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
First Time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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 same
were not provided by the Banks during the audit period. Since the Books of Accounts of the
Company are maintained properly, this audit qualification will not have any impact on the
Financial Statement of the Company.
iii. Auditors' Comments on (i) or (ii) above:
Without bank statement and balance confirmation from respective Banks, it is not
possible 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 entries
relating to Receipts and Payments, having aggregated value of Rs. 7.15 Crores and Rs. 5.72
Crores, 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 cannot
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/since how long continuing
Appeared for the first time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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. After
reconciliation, there will not be any mismatch.
iii. Auditors' Comments on (i) or (ii) above:
The management should immediately reconcile book balance with balance in bank
statements 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 to
Rs. 5.17 Crores as at March 31, 2019. In absence of balance confirmation from the bank and
other 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/since
how long continuing
First Time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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 same
were not provided by the Banks during the audit period. Since the Books of Accounts of the
Company are maintained properly, this audit qualification will not have any impact on the
Financial Statement/results of the Company.
iii. Auditors' Comments on (i) or (ii) above
Without bank statement and balance confirmation from respective Banks, it is not
possible 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. 957.76
Crores and received loans and advances from related parties amounting to Rs. 301.18
Crores. As per the information given by the management, all these related parties have
made substantial losses and their net worth has been fully eroded. However, the company
has 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/since
how long continuing
First Time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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 this
loans/advance would be recovered from the Related Parties regardless of current losses. In
view 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 has
fully eroded.
Audit Qualification: 11
a. Details of Audit Qualification:
The company has not provided audited financial statements of its wholly owned
subsidiary M/s. Pratibha Holdings (Singapore) Pte. Ltd. In absence of these Financial
Statements, we cannot comment on any requirement for provision for diminution in value of
investment.
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 auditor,
Management'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 to
auditors of the said subsidiary was not made and due to non-payment the Auditor has not
conducted audit. Further, the accounts are maintained by the holding company, available
details are provided to the Auditor.
iii. Auditors' Comments on (i) or (ii) above
Without audited financial statements, any impact on consolidated financial statement
can 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 Crore
in its subsidiary M/s. Bhopal Sanchi Tollways Private Limited. Its Concession Agreement
has been terminated by NHAI. As informed to us, the subsidiary company has lodged 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 auditor,
Management'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. The
said award is challenged by M/s. Bhopal Sanchi Tollways Private Limited u/s 34 of the
Arbitration Act. Hence, provision for impairment of the investment is not made by the
Company.
iii. Auditors' Comments on (i) or (ii) above
The claim amount is dependent upon the outcome of arbitration. Hence until then the
amount 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 be
deposited with appropriate government authorities. The company has not made provision for
interest on these dues on account of delay in depositing them. The management is of the
opinion that since the matter in under CIRP, there will not be any possibility of payment
of such interest. Since the management has not estimated overall liability on account of
interest, 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/since
how long continuing
Repetitive since FY 2015-16
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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 such
interest 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 the
CIRP is known only after its completion, it cant be assumed that there will not be any
liability 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 the
accuracy of recognition, measurement and presentation of revenues and other related
balances in view of the applicability of Ind AS 115 "Revenue from Contracts with
Customers". The company has not evaluated impact 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 auditor,
Management'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 the
accounts are maintained at site level. As the Company was facing fund crisis, many
employees left the Company including site in charge. In view of the high employee
attrition level, no. of sites and fund crisis, there might be some procedural lapses in
following IND AS. In this back drop, the possible impact of the same is not identifiable
by 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 on
financial statements on its adoption.
Audit Qualification: 15
a. Details of Audit Qualification:
During the year, the Company has unilaterally written back certain liabilities
amounting to Rs. 48.66 Crores. The management of the Company is of the opinion that based
on their analysis of balances and due to various reasons, these balances were not payable
and hence written back. To that extent, the liabilities, current year's loss 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
Appeared for the first time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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 not
require 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 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 auditor,
Management'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 sites
where 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. 376.24
Crores, as at the balance sheet date, the management had conducted physical verification
at 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, no
physical verification could be carried out for the balance assets having written down
value of Rs. 264.24 Crores, due to such assets being either under client custody, seized
by vendors / subcontractors, or such assets being available at sites with no access to the
company. Based on such verification and management's own assessment for balance locations,
the company has written off assets having aggregate written down value of Rs. 69.11 Crores
during the year. No details have been provided for arriving at the management assessment
for the location not physically verified. In absence of these details, we cannot ascertain
the 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 auditor,
Management'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 completion
stage most of the assets were not depreciated fully or not useable. Due to this, assets
were not depreciated fully and not in condition to use or transfer at any other running
project. 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 its
usability.
Audit Qualification: 18
a. Details of Audit Qualification:
The company has not done impairment testing for the Property, Plant and Equipment, not
physically verified. In view of the limited information provided to us by the management,
we cannot comment on the requirement of the impairment for these assets and its
consequential 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 auditor,
Management'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 at
sites/ project places. In view of the same, it was not possible to do impairment testing
or 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 the
requirement of impairment. Without conducting physical verification, it is not possible to
know the exact condition of assets as the company now don't have manpower on each of the
project 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 the
employees have already left the company, there will be no additional liability on account
of employee benefits. In absence of valuation report, we cannot comment on the 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
First time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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 further
comments.
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 for
advances paid to foreign vendors, aggregating to Rs. 4.50 Crores and Rs. 1.20 Crores,
respectively, as at March 31, 2019, could not be ascertained
due to improper accounting. In the absence of complete details, their closing foreign
currency balances could not be translated at the rate as on the balance sheet as required
under IND AS 21 and consequential impact on standalone 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 auditor,
Management'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 company
will put its efforts in next financial year to regularise the accounts by passing
necessary 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 Duty
amounting to Rs. 24.44 Crores. The company has not filed Service Tax and Excise Returns
since 2016-17, to claim credits against Service Tax and Excise Duty liabilities. In
absence of submission of returns, the credits cannot be utilized. To this extent, the
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 auditor,
Management's Views:
The Company will try to file pending Service Tax and Excise Returns, so as to claim
credits.
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 resigned
from 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 with
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 auditor,
Management'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 which,
powers of Board of Directors of the Company have been suspended and the same is vested
with Mr. Anil Mehta Resolution Professional. As such, composition of Board of
Directors 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 repay
Public Deposits amounting to Rs. 18.48 Crores and interest thereon amounting to Rs. 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 auditor,
Management'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 make
payment to the Public Depositors nor any other creditors or statutory dues. Due to such
financial 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 and
the provision for penal interest has been made on estimated basis. In the absence of party
wise details, we cannot ascertain the possible impact on standalone financial results due
to short / excess provision for Interest. Further, penal interest for the months of
February & 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/since
how long continuing
First Time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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, address,
principal amount outstanding and other relevant details. Other than the register of public
deposit, this audit qualification is self-explanatory and hence do not require further
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 with
Rule 4 of the Companies (Cost Records and Audit) Rules, 2014, the cost audit has not been
conducted 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/since
how long continuing
Repetitive since FY 2017-18
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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 of
the 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 with
Rule 13 of the Companies (Accounts) Rules, 2014, the Internal Audit of the functions and
activities 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/since
how long continuing
Appearing for the first time
d. For Audit Qualification(s) where the impact is quantified by the auditor,
Management'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/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 |
2,010.26 |
2,010.26 |
3 |
Net Profit/(Loss) |
(1,616.52) |
(1,616.52) |
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 |
(4,336.71) |
(4,336.71) |
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. 5,051.89 Crores and its net worth is fully
eroded. It has incurred net loss during the year ended March 31, 2019 amounting to Rs.
1,616.50 Crores as well as in previous years. It is unable to repay its debts, statutory
obligations and pay salaries apart from other obligations/commitments. The application of
Holding Company's Financial Creditors under section 9 of the Insolvency and Bankruptcy
Code (IBC) had been admitted by Hon'ble National Company Law Tribunal, Mumbai Bench and
Resolution Professional ("RP") was appointed vide order dated March 14, 2019.
Till the date of signing of Statement, no resolution plan had been approved. Further,
application for liquidation of the Holding Company has been filed with the NCLT. All these
indicate a material uncertainty that may cast significant doubt upon the Groups' ability
to continue as a Going Concern. However, the consolidated financial results are prepared
on 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 Auditors,
Management'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' includes
certain contractual claims amounting to Rs. 310.60 Crores and Rs. 1,003.36 Crores,
respectively. These amounts have been ascertained by their respective managements based on
their estimates. Out of these contractual claims, claims of the Holding Company and of the
JVs', as reported by their auditors, amounting to Rs. 259.33 Crores and Rs. 1,003.36
Crores, respectively,
are either formally submitted but not yet approved by respective clients or no formal
submissions have been made to respective clients. The amounts of these claims are subject
to change post approval from clients. To the extent of Rs. 1,262.70 Crores, Inventories
are overstated and accumulated losses are understated in the consolidated 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
Repetitive since Financial year 2015-16
d. For Audit Qualification(s) where the impact is quantified by the Auditors,
Management's Views:
The Group has prepared the claims based on contractual terms, which have been submitted
to the clients. Further, the Group is in process of submitting pending claims with the
clients. 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 auditor
of that JV, as reported in the JV's audit report, with the detailed working of
Construction 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 not
possible 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 any,
on 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 Auditors,
Management'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 average
margin, question of cost to completion and consequent profitability/ and or losses on
projects 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 progress
as expenses are recognised along with revenue. Further, even if the projects are given on
back to back basis, as per the requirement of applicable Ind AS, it is mandatory to
prepare cost to complete to arrive at project profitability and in case of possible loss,
making provision for the same. Without proper estimation for cost to complete and
estimated 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 trade
payables are not received from third parties. These balances are subject to confirmations
and consequent adjustments, if required. In absence of balance confirmations, 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/since how long continuing
Repetitive since Financial year 2017-18.
d. For Audit Qualification(s) where the impact is quantified by the Auditors,
Management'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 where
there is no practise of giving any balance confirmation certificate. There will not be any
impact on financial statement/Financial Results
iii. Auditors' Comments on (i) or (ii) above:
None of the balance confirmation is available with respect to Trade Receivable,
Payable, Loans & Advances given and Deposits. Without balance confirmation, it is
difficult 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 the
respective 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 charges
for the period February 01, 2019 to March 31, 2019. However, the Holding Company and such
JVs, as reported in the JVs' audit reports, have not made provision for such interest and
charges, due to commencement of CIRP period under IBC. To the extent of Rs.28.95 Crores,
finance expenses, loan liability, loss for the year and accumulated losses of Group 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 Auditors,
Management's Views:
The impact of audit qualification is quantified by the Auditor. The remarks of the
Auditor 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 Crores
are not reconciled with their respective bank statements which are showing aggregate
balance of Rs. 58.19 Crores, for reasons other than Interest & Other charges. Thus,
loan balances of the Holding Company are overstated by Rs.128.42 Crores. Also, the current
accounts of the Holding Company have long standing unreconciled balance aggregating to
Rs.2.68 Crores. To the extent of Rs. 2.68 Crores, bank balances are overstated. In absence
of detailed reconciliation statement, 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 auditor,
Management'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 not
able 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 impact
on financial statements. The management should immediately reconcile book balances with
balances 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. 801.43
Crores, and current accounts of the Holding Company and of the JVs', as reported in the
JVs' audit reports, having aggregate balance of Rs. 0.53 Crores and Rs. 0.33 Crores,
respectively, are not confirmed due to non-availability of statement / confirmation from
respective Banks. In absence of sufficient appropriate audit evidence, we are unable to
determine 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 auditor,
Management'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 same
were not provided by the Banks during the audit period. Since the Books of Accounts of the
Company are maintained properly, this audit qualification will not have any impact on the
Financial Statement of the Company.
iii. Auditors' Comments on (i) or (ii) above:
Without bank statement and balance confirmation from respective banks, it is not
possible 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, there
are many entries relating to Receipts and Payments, having aggregated value of Rs. 7.15
Crores and Rs. 5.72 Crores, 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 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 auditor,
Management'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. After
reconciliation, there will not be any mismatch.
iii. Auditors' Comments on (i) or (ii) above:
The management should immediately reconcile book balance with balance in bank
statements 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 Baroda,
amounting to Rs. 5.17 Crores as at March 31, 2019. In absence of balance confirmation from
the 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 auditor,
Management'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 same
were not provided by the Banks during the audit period. Since the Books of Accounts of the
Company are maintained properly, this audit qualification will not have any impact on the
Financial Statement/results of the Company.
iii. Auditors' Comments on (i) or (ii) above
Without bank statement and balance confirmation from respective Banks, it is not
possible 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. 120.27
Crores 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 the
JVs' audit reports, all these related parties have made substantial losses and their net
worth has been fully eroded. However, the Group has 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/since how long continuing
First Time
d. For audit Qualification(s) where the impact is quantified by the auditor,
Management'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 this
loans/advance would be recovered from the Related Parties regardless of current losses. In
view 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 has
fully eroded.
Audit Qualification: 11
a. Details of Audit Qualification:
The Holding company has not provided audited financial statements of its wholly owned
subsidiary M/s. Pratibha Holdings (Singapore) Pte. Ltd. In absence of these Financial
Statements, we cannot comment on any requirement for provision for diminution in value of
investment.
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 auditor,
Management'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 to
auditors of the said subsidiary was not made and due to non-payment the Auditor has not
conducted audit. Further, the accounts are maintained by the holding company and available
details are provided to the Auditor.
iii. Auditors' Comments on (i) or (ii) above
Without audited financial statements, any impact on consolidated financial statement
can 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 Concession
Agreement has been terminated by NHAI. As informed to us, the subsidiary company has
lodged 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 auditor,
Management'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. The
said award is challenged by /s. Bhopal Sanchi Tollways Private Limited u/s 34 of the
Arbitration Act. Hence, provision for impairment of the investment is not made by the
Company.
iii. Auditors' Comments on (i) or (ii) above
The claim amount is dependent upon the outcome of arbitration. Hence, until then the
amount 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 to
Rs. 129.77 Crores and Rs. 13.58 Crores, respectively, which are pending to be deposited by
the respective entities with appropriate government authorities. The Holding company and
the JVs', as reported by the JVs' auditors, have not made provision for interest on these
dues on account of delay in depositing them. Since the management of Holding Company and
of the JVs' has not estimated overall liability on account of interest, 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
Repetitive since FY 2015-16
d. For audit Qualification(s) where the impact is quantified by the auditor,
Management'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 such
interest 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 the
CIRP is known only after its completion, it cannot be assumed that there will not be any
liability 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 provided
sufficient appropriate information to evaluate the accuracy of recognition, measurement
and presentation of revenues and other related balances in view of the applicability of
Ind AS 115 "Revenue from Contracts with Customers". The Group has not evaluated
impact 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 auditor,
Management'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 the
accounts are maintained at site level. As the Company was facing fund crisis, many
employees left the Company including site in charge. In view of the high employee
attrition level, no. of sites and fund crisis, there might be some procedural lapses in
following IND AS. In this back drop, the possible impact of the same is not identifiable
by 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 on
financial statements on its adoption.
Audit Qualification: 15
a. Details of Audit Qualification:
During the year, the Group has unilaterally written back certain liabilities amounting
to 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 various
reasons, these balances were not payable and hence written back. To that extent, the
liabilities, current year's loss and accumulated losses are understated in the
consolidated 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 auditor,
Management'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 not
require 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 the
projects have been assigned to other contractors, as reported by the auditors of JVs. As
per the information & explanation given by the management of such JVs, there are no
liabilities in such projects. However, there are certain provision for expenses
aggregating to Rs. 38.74 Crores is appearing in Other Financial Liabilities. No detail of
the provision has been provided to the auditor of such JVs for verification. In absence of
the details, to the extent of amount of the provision, the liabilities and accumulated
losses 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 auditor,
Management's Views:
The provisions for expenses were made at the time when the projects were executed by
the Company/JV. It is evident from the ongoing Insolvency Process that the Company was
facing server financial crisis. Many projects were terminated by the clients due to delay
in project completion. As stated earlier, the site/project in charges have left the
Company on account of non-payment of salary. In view of the aforesaid facts and
circumstances, the provisions made for expenses were not reconciled and appropriate
entries in the books were not made.
The Company will reconcile the accounts of the sites and necessary actions will be
taken. 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 assets
have 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 auditor,
Management'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 sites
where 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 down
value of Rs. 376.24 Crores, as at the balance sheet date, the management of the Holding
Company had conducted physical verification at 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, no physical verification could be carried
out for the balance assets having written down value of Rs. 264.24 Crores, due to such
assets being either under client custody, seized by vendors / subcontractors, or such
assets being available at sites with no access to the company. Based on such verification
and management's own assessment for balance locations, the Holding Company has written off
assets having aggregate written down value of Rs. 69.11 Crores during the year. No details
have been provided for arriving at the management's assessment for the location not
physically verified. In absence of these details, we cannot ascertain the 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 auditor,
Management'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 completion
stage most of the assets were not depreciated fully or not useable. Due to this, assets
were not depreciated fully and not in condition to use or transfer at any other running
project. 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 its
usability.
Audit Qualification: 19
a. Details of Audit Qualification:
The Holding Company has not done impairment testing for the Property, Plant and
Equipment, not physically verified. In view of the limited information provided to us by
the management of the Holding Company, we cannot comment on the requirement of the
impairment for these assets and its consequential impact on the 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 auditor,
Management'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 at
sites/ project places. In view of the same, it was not possible to do impairment testing
or 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 the
requirement of impairment. Without conducting physical verification, it is not possible to
know the exact condition of assets as the Group now don't have manpower on each of the
project 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 Ind
AS 19. The management of the Holding Company, is in opinion that since the matter is under
CIRP and also majority of the employees have already left the company, there will be no
additional liability on account of employee benefits. In absence of valuation report, we
cannot 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 auditor,
Management'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 further
comments.
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', for
foreign vendors having credit balance aggregating to Rs. 4.50 Crores and Rs. 3.14 Crores,
respectively, and for advances paid to foreign vendors, aggregating to Rs. 1.20 Crores and
Rs. 7.67 Crores, respectively, as at March 31, 2019, could not be ascertained due to
improper accounting. In the absence of complete details, their closing foreign currency
balances could not be translated at the rate as on the balance sheet as required under IND
AS 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 auditor,
Management'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 will
put its efforts in next financial year to regularise the accounts by passing necessary
entries 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 Holding
Company and of the JVs', aggregating to Rs. 24.44 Crores and Rs. 7.01 Crores,
respectively, which pertains to the Service Tax, and Excise Duty. The Holding Company and
the JVs', as reported in the JVs' audit reports, have not filed Service Tax and Excise
Returns since long, to claim credits against Service Tax and Excise Duty liabilities. In
absence of submission of returns, the credits cannot be utilized. To this extent, the
Group'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 auditor,
Management'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 claim
credits.
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 had
resigned from its Board and no new appointments have been made during the financial year
2018-19. As a result, it's composition of Board of Directors, Audit Committee, Nomination
& Remuneration Committee and Stakeholders Relationship Committee was not in compliance
with 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 auditor,
Management'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. Pursuant
to which, powers of Board of Directors of the Holding Company have been suspended and the
same is vested with Mr. Anil Mehta Resolution Professional. As such, composition of
Board 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 failed
to repay Public Deposits amounting to Rs. 18.48 Crores and interest thereon amounting to
Rs. 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 auditor,
Management'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 to
make payment to the Public Depositors nor any other creditors or statutory dues of the
Holding Company. Due to such financial distress, the Holding Company is under Corporate
Insolvency 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 Public
Deposits and the provision for penal interest has been made on estimated basis. In the
absence of party wise details, we cannot ascertain the possible impact on consolidated
financial results due to short / excess provision for Interest. Further, penal interest
for 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 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/since how long continuing
First Time
d. For audit Qualification(s) where the impact is quantified by the auditor,
Management'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 name,
address, principal amount outstanding and other relevant details. Other than the register
of public deposit, this audit qualification is self-explanatory and hence do not require
further 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 with
Rule 4 of the Companies (Cost Record and Audit) Rules, 2014, the cost audit has not been
conducted 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 auditor,
Management'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 of
the 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 with
Rule 13 of the Companies (Accounts) Rules, 2014, the Internal Audit of the functions and
activities of the Holding 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/since how long continuing
Appearing for the first time
d. For audit Qualification(s) where the impact is quantified by the auditor,
Management'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 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 |
|