We have audited the accompanying financial statements of M/s. PBA Infrastructure Limited (“the Company”),
which comprise the Balance Sheet as at March 31st, 2024, the Statement of Profit and Loss (including Other
Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year ended,
and a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
financial statements give the information required by the Companies Act, 2013 (‘Act’) in the manner so required
and give a true and fair view in accordance with the accounting principles generally accepted in India, including
the Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Act, of the state of affairs(financial
position) of the Company as at 31st March 2024 and its profit and loss (financial performance including other
comprehensive income), its cash flows and changes in equity for the year ended on that date.
Basis for Qualified Opinion
i. The Company has not performed impairment testing with respect to the investments in various Joint
Ventures and Associates as required by Indian Accounting Standard (Ind AS 36) ‘Impairment of assets’; hence
the impact on the carrying amount of investment is not ascertainable.
ii. Balances of trade receivables, trade payables, loans and advances, Deposits given/ taken are subject to
confirmations, reconciliations and consequent adjustments.
iii. Company follows accounting practice of recognizing revenue on the basis percentage completion method.
Company being an EPC contractor raises claims / arbitration money with its principals / Customers for the
delay on obtaining approvals, cost escalation, etc. As per Company policy, though the claims are raised
for the actual loss incurred by the Company (SOC), the same is recognized in the books at realizable value
determined by the internal team of the Company.
Though, these claims are not acknowledged by the principles/customer, the same being intangible/
uncertified in nature is being classified as a work in progress. The said claims though classified under WIP
(Current Asset) are subject to uncertainty as to recoverability. Unbilled work in progress of Rs.86.95 crores
and trade receivable amounting to Rs.82.53 crores as of 31.03.2024 is due to the various claims raised
on the Clients based on the terms and conditions implicit in the Engineering & Construction Contracts in
respect of closed/ suspended / under construction projects and which are overdue for a substantial period
of time. These claims are mainly in respect of cost over run arising due to suspension of work, client delay,
changes in scope of work, deviation in design and other factors for which company is at various stages of
negotiation/ discussion with the clients or under Arbitration/ litigation. Based on discussion with principal/
arbitrations (which are at various stages) , litigations and on legal opinion / past experience with respect to
such claims , management is of the view to that the aforementioned amount out of which Rs.11.59 crores
have been written off during the quarter ended 31.03.2024 due to not-tenable and therefore this amount is
not recoverable.
iv. Fixed Asset register is still under compilation to have proper records showing full particulars, including
quantitative details and situation of property, plant and equipment. Company to have a regular program of
physical verification of its fixed assets, periodically.
v. There are arbitration proceedings / legal cases against by / the Company which may result in Compensation
/ interest / penalties.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(9) of the
Companies Act, 2013 (1be Act”). Our responsibilities under those Standards are further described in the Auditor's
Responsibilities for Audit of the Standalone Financial Results section of our report. We are independent of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountant of India together
with the ethical requirements that are relevant to our audit of the financial results under the provisions of the
Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Notes of the Financial Results that the Company has incurred net loss during the year and
the current liabilities have exceeded the current assets. Further, The Company has defaulted in repayment of
principal dues and interest payable to banks. These events indicate that a material uncertainty exists that may
cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
Emphasis of Matters
We draw attention to the following matters:
i. The company has made defaults in repayment of its obligations towards its lenders and an amount of
Rs. 315.15 Crores was overdue as per the SARFASEI Notice issued by the consortium bankers out of which
the amount of Rs. 26.50 Crores of State Bank of Patiala is settled under the OTS Scheme of State Bank of
India. This default indicates the existence of a material uncertainty that may cast apprehension about the
Company’s ability to function as a going concern.
However, the financial results of the Company have been prepared on a going concern basis & do not
include any adjustments that might result from the outcome of this uncertainty. We would also like to draw
attention to the fact that in absolute terms, total outside liabilities of the company exceed underlying
current assets.
ii. Certain current/cash credit/term loan accounts from banks & financial institutions have not been reconciled
as on 31.03.2024. Being classified as Non-Performing Assets by banks and financial institutions, the Company
has not been providing for interest since 1st January 2018 on any of the outstanding due from Banks and
Financial Institutions. The same policy of not providing interest has been continued in the FY 2023-24. In
absence of the balance confirmations and statements of said loans from banks and financial institutions, the
balance outstanding and interest charged thereupon by the lenders for FY 2023-24 remains unascertainable.
Lead Bank under consortium had approached CMM Court to take physical possession of the various secured
assets against total consortium overdue of Rs.315.15 Crore under SARFASEI Act, 2002. The Company has also
received notice of physical possession of various secured assets from the lenders in response to which the
company has filed a counter case and received stay on proceedings from DRT court. However, out of total
consortium overdue of Rs. 315.15 Crore, the amount of Rs. 26.50 Crores of State Bank of Patiala is settled
under the OTS Scheme of State Bank of India by the company. However, our opinion is not modified in all
above these matters.
Key Audit Matters:
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. We have determined that there are no key audit matters to communicate in our report.
Other Information:
The Company’s Board of Directors are responsible for the preparation of the other information. The other
information comprises the information included in the Management Discussion and Analysis, Board’s Report including
Annexures to Board’s Report, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and those charged with Governance for the Financial Statements:
The Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of
the financial position, financial performance, and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the accounting Standards specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements:
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
on influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has adequate internal financial controls system in place and
the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the management. 1
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including
the disclosures, and whether the standalone financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in Internal control that we
identify during our audit.
We also provide those charges with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the standalone financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulations precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonable be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government
of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A” a statement on
the matters specified in paragraph 3 and 4 of the order.
2) As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and except for the matter described in the Basis for Qualified Opinion paragraph,
obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit.
b) Except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion, proper
books of account as required by law have been kept by the Company so far as it appears from our
examination of those books.
c) The Balance Sheet, the Statement of profit and Loss including Other Comprehensive Income, Statement
of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with
the relevant books of account.
d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in
our opinion, the aforesaid financial statements comply with the Ind AS specified under section 133 of
the Act, read with Companies (Indian Accounting Standards) Rules, 2015 as amended.
e) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on March 31,2024 taken on
record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being
appointed as a director in terms of Section 164(2) of the Act.
g) The qualification relating to the maintenance of accounts and other matters connected therewith are
as stated in the Basis for Qualified Opinion paragraph above.
h) The managerial remuneration paid by the Company to its directors is as per the provisions of section
197 read with Schedule V of the Act for the year ended March 31, 2024.
i) With respect to the adequacy of the internal financial controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our report
expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal
financial controls over financial reporting.
j) With respect to the other matters to be included in the Auditor’s Report in accordance with the Rule
11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our
information and according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations on its financial position in its financial
statement, Refer Note no A-25 to the financial statement,
b. The Company did not have any long-term contracts including derivative contracts for which there were
any material foreseeable losses.
c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education
and Protection Fund by the Company.
d. The management has represented that, to the best of its knowledge and belief, other than as disclosed
in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed
funds or share premium or any other sources or kind of funds) by the company to or in any other
person(s) or entity(ies), including foreign entities ‘Intermediaries’, with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the company
‘Ultimate Beneficiaries’ or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;
e. The management has represented, that, to the best of its knowledge and belief, other than as disclosed
in the notes to the accounts, no funds have been received by the company from any person(s) or
entity(ies), including foreign entities ‘Funding Parties’, with the understanding, whether recorded in
writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ‘Ultimate
Beneficiaries’ or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
and
f. Based on our audit procedures, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of Rule 11E, as provided under 9a) and (b) above, contain
any material mis-statements.
g. The Company has not declared or paid any dividend during the year.
h. Based on our examination which included test checks, the company has used accounting software’s
for maintaining its books of account, which have a feature of recording audit trail (edit log) facility
and the same has operated throughout the year for all relevant transaction recorded in the respective
software. Further, during the course of our audit we did not come across any instance of audit trail
feature being tampered with.
For N K Mittal & Associates
Chartered Accountants
Firm Registration Number: 113281W
N K Mittal
(Partner)
Membership Number: 046785
UDIN: 24046785BKAOME1932
Place: Mumbai
Date: 30th May, 2024
1
Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
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