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PNC Infratech Ltd.

BSE: 539150 Sector: Infrastructure
NSE: PNCINFRA ISIN Code: INE195J01029
BSE 00:00 | 24 Apr 2020 PNC Infratech Ltd
NSE 05:30 | 01 Jan 1970 PNC Infratech Ltd

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OPEN 125.10
PREVIOUS CLOSE 125.50
VOLUME 2045
52-Week high 219.40
52-Week low 80.85
P/E 6.05
Mkt Cap.(Rs cr) 3,171
Buy Price 123.00
Buy Qty 2.00
Sell Price 131.50
Sell Qty 150.00
OPEN 125.10
CLOSE 125.50
VOLUME 2045
52-Week high 219.40
52-Week low 80.85
P/E 6.05
Mkt Cap.(Rs cr) 3,171
Buy Price 123.00
Buy Qty 2.00
Sell Price 131.50
Sell Qty 150.00

PNC Infratech Ltd. (PNCINFRA) - Auditors Report


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Company auditors report

to the Members of

PNC INFRATECH LIMITED

Report on the Audit of standalone Financial statements

Opinion

We have audited the accompanying standalone financial statements of PNC INFRATECHLIMITED ("the Company") which comprise the Balance Sheet as at 31 March 2019the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe standalone financial statements including a summary of the significant accountingpolicies and other explanatory information (herein after referred to as "standalonefinancial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the standalone financial position of the Company as at 31st March 2019 and itsstandalone financial performance including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section143 (10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the standaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules madethereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit matter

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statement of the current period.These matters were addressed in the context of our audit of the standalone financialstatement as a whole and in forming our opinion thereon and we do not provide a separateopinion on these matters. We have determined the matters described below to be the keyaudit matters to be communicated in our report.

Valuation of investment unsecured loans and trade receivable with the associatecompany.

S.No Description Of Key Audit Matter description of Auditor’s response
1 Toll collection of the associate company is lower than the projections and there is a stress of repayment of principal to the lenders of the company. Amount involve in the form of investment unsecured loan and trade receivable to be impaired. However the company has entered into Share Purchase Agreement on 4th May 2019 with Cube Highways and Infrastructure Pte Ltd. We have performed the following procedures for verifying the stake of company in the form of valuation of investment unsecured loans and trade receivables.
The Company has entered into a Share Purchase Agreement (SPA) dated 4th May 2019 with a Purchaser inter alia with Cube Highways and Infrastructure Pte Ltd. for sale of its entire stake i.e. 29324000 Equity shares representing (15.12%) of the total shareholding in Ghaziabad Aligarh Expressway Highways Private Limited (GAEPL) "associate" of the company we have obtained the agreement
The company may recover amount of stake in forms of equity unsecured loans and trade receivables and may not require impairment.

Information other than the standalone Financial statements and Auditor’s reportthereon

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Director’s Reportincluding annexures to Director’s Report but does not include the standalonefinancial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the separate standalone financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. Based on therecords information and explanation provided we have nothing to report in this regard.

Management’s responsibility for the standalone Financial statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS standalone financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with relevant rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgement and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS standalone financialstatements that give a true and fair view and are free from material misstatementswhether due to fraud or error.

Auditor’s responsibility

Auditor’s responsibilities for the Audit of the standalone Financial statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements. A furtherdescription of our responsibilities for the audit of the standalone financial statementsis included in "Annexure – A" of this auditor’s report. report onother Legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order 2016 (‘theOrder’) issued by the Central Government of India in terms of section 143 of the Actwe give in the Annexure–"B" statement on the matters specified inparagraphs 3 and 4 of the Order;

2. As required by section 143(3)of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c. The Balance Sheet Statement of Profit and Loss Statement of Change in Equity andCash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion the aforesaid Ind AS standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rulesissued there under;

e. On the basis of written representations received from the directors as on 31 March2019 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31 March 2019 from being appointed as a director in terms of Section 164(2) of theAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure – C".

g. With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 read with schedule V of the Act.

h. With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigation on its financial positionin its standalone financial statements- Refer Note no. 37 to the standalone financialstatements;

ii) There are no any material foreseeable losses on long term contracts includingderivative contract required under the applicable law or Indian accounting standards;

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For s.s. Kothari Mehta & Co.
(Chartered Accountants)
Firm Registration no. 000756N
n ( eeraj Bansal)
Place: Agra Partner
Date: May 24 2019 Membership No. : 095960

AnneXure ‘A’ to tHe AudIt report to tHe pnC InFrAteCH LIMIted

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonable knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work; and (ii) to evaluate the effectof any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

ANNEXURE – "B"TO THE INDEPENDENT AUDITOR’S REPORT TO THE PNC I NFRATECH LIMITED

Referred to in paragraph 1 of report on other legal and regulatory requirement’sparagraph of our report on the standalone financial statement of even date (i) (a) TheCompany has maintained proper records showing full particulars including quantitativedetails and situation of fixed assets.

(b) As explained to us the fixed assets are physically verified by the management in aphased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. According to informationand explanation given to us the discrepancies noticed on current phase of physicalverification were not material (c) Based on the available records as certified by themanagement the title deed of immovable property is held in the name of the company.

(ii) (a) The inventories of the Company have been physically verified by the managementduring the year.

(b) In our opinion and according to the information & explanations given to us theprocedures of physical verification of inventory followed by the management are reasonableand adequate in relation to the size and nature of the business of the Company.

(c) In our opinion and according to the information & explanations given to us theCompany is maintaining proper records of inventory. During the year the physicalverification was conducted at various sites and no material discrepancies have beennoticed. The process of recording of physical verification needs to be furtherstrengthened considering the expansion and nature & cycle of various projects.

(iii) (a) As informed to us the Company has granted unsecured loans to its 10subsidiaries & Interest free unsecured loan to an associate and covered in theregister maintained under section 189 of the Companies Act 2013 the balance outstandingRs. 36548.29 Lakhs (including interest)

(b) The tenure of agreement period of repayment are six months from the date ofdisbursement or receipt of grant/ annuity the receipt of principle amount as explained itwill be recovered once the payment received by borrower from respective authority and inrespect of interest free loan it will be converted into share warrant/optionallyconvertible debenture.

(c) There is overdue interest of Rs. 1673.20 Lakhs. As explained the company ispursuing for its recovery.

(iv) The loans investments guarantees and pledge of securities given to/forsubsidiaries/associates are in compliance of section 185 and 186 of the Companies Act2013 as these are covered under exceptions as provided in section 185 and 186 of the Actand are within the prescribed limits.

(v) The Company has not accepted any deposits from the public within the meaning ofdirectives issued by the Reserve Bank of India and provisions of sections 73 to 76 or anyother relevant provisions of the Companies Act 2013 and the rules framed there under.

(vi) We have broadly reviewed the books of account relating to materials Labour andother items of cost maintained by the Company as specified by the Central Government ofIndia under section 148(1) of the Companies Act 2013 and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have not madea detailed examination of the records with a view to determine whether they are accurateand complete.

(vii) (a) According to the information and explanations given to us and the records ofThe Company examined by us in our opinion the Company is generally regular and is inprocess of aligning with changing regulations in depositing undisputed statutory duesincluding Provident Fund Investor Education and Protection Fund Employees’ StateInsurance Income-Tax Sales Tax/VAT/Work Contract Tax Service Tax Customs Duty ExciseDuty Cess Goods & Service Tax and other material statutory dues as applicable withthe appropriate authorities .

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of Income-Tax Sales-Tax Service TaxCustoms Duty Excise Duty Value added tax Goods & Service Tax and Cess as at March31 2019 which have not been deposited on account of disputes are as follows: -

Name of the statute Nature of dues Period to which The amount relates Forum where dispute is pending Demand amount (Rs.in lakhs) Amount deposited ( Rs. In lakhs)
UP Entry Tax Act 2007 UP Entry Tax 2015-16 Commercial Tax Tribunal Agra 496.67 -
2013-14 Commercial Tax Tribunal Agra 45.39 -
2014-15 Commercial Tax Tribunal Agra 50.73 -
UP VAT Act 2007 VAT 2006-07 TDS certificate to be get verified 38.1 -
2010-11 Commercial Tax Tribunal Agra 78.47
2013-14 Additional Commissioner Grade II Agra 3276.77 -
2014-15 Additional Commissioner Grade II Agra 4767.71
2015-16 Additional Commissioner Grade II Agra 1276.93
Uttarakhand VAT Act 2005 VAT 2005-12 Joint Commissioner Haldwani 211.04 -
2013-14 Joint Commissioner Haldwani 87.74 -
2014-15 Joint Commissioner Haldwani 76.35
Haryana VAT Act 2003 VAT 2010-12 Taxation Tribunal Chandigarh 34.75 -
2010-12 Dy. Excise and Taxation Officer Karnal 22.2 -
Central Excise & Service Tax Act 1994 Service Tax 2003-19 CESTAT Dohara 185.63 -
Central Excise & Service Tax Act 1994 Service Tax 2005-19 CESTAT Kanpur 386.93 -
Income Tax Act’1961 Income Tax 20010-11 Allahabad High Court 645.81 -
Labour Welfare Act’1953 Labour Cess 2010 Hon’ble MP High Court 268.25 -

(viii) According to the records of the Company examined by us and the information andexplanations given to us in our opinion the Company has not defaulted in repayment ofits dues to Banks/Financial Institution.

(ix) As per the information and explanation given to us and on the basis of ourexamination of the records during the year the company has not raised any money by wayof Initial Public Offer or Further Public Offer. The term loan amounts have been appliedfor which they have been obtained. (Refer note no.19 to the standalone financialstatements)

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India we haveneither come across any instance of fraud on or by the Company noticed or reported duringthe year nor have we been informed of such case by the management.

(xi) As per the information and explanation given to us and on the basis of ourexamination of the records the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

(xii) The company is not Nidhi Company therefore this clause is not applicable to thecompany.

(xiii) As per the information and explanation given to us and on the basis of ourexamination of the records the company has transacted with the related parties which arein compliance with sections 177 and 188 of Companies Act 2013 and the details have beendisclosed in the standalone financial statements refer note no. 42 to the standalonefinancial statements.

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

(xv) As per the information and explanations given to us and on the basis of ourexamination of the records the company has not entered into any non-cash transactionswith directors or persons connected with him.

(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Therefore this clause is not applicable to the company.

For s.s. Kothari Mehta & Co.
(Chartered Accountants)
Firm Registration no. 000756N
n ( eeraj Bansal)
Place: Agra Partner
Date: May 24 2019 Membership No. : 095960

ANNEXURE - C TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF PNC INFRATECH LIMITED

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PNCINFRATECH LIMITED ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management’s responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on "the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India". These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company’s policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor’s responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We have conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the"Guidance Note") and the Standards on Auditing issued by ICAI anddeemed to be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company’s internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of standalone financial statements for external purposes in accordancewith generally accepted accounting principles. A company’s internal financial controlover financial reporting includes those policies and procedures that

1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and

3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls over Financial reporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate. opinion

In our opinion based on records the Company has in all respect an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were generally operating effectively as at March 31 2019basedon "the internal control over financial reporting system & procedures"criteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India"

For s.s. Kothari Mehta & Co.
(Chartered Accountants)
Firm Registration no. 000756N
n ( eeraj Bansal)
Place: Agra Partner
Date: May 24 2019 Membership No. : 095960


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