172@29@16@54!~!172@29@0@53!~!|commonstore|commonfiles|moneycontrol_header.php?cid=0&s_cid=0&radar_off=0&is_revamped_header=0&is_responsive=1&sec=PNC_ANNUALREPORT&priceinter=1&frommc=1!~!www|moneycontrol|com!~!|commonstore|commonfiles|moneycontrol_header.php!~!is_mobile=false
Moneycontrol
SENSEX NIFTY
you are here:

Patel Engineering Company Ltd.

BSE: 531120 | NSE: PATELENG |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE244B01030 | SECTOR: Construction & Contracting - Civil

BSE Live

Sep 25, 16:00
12.73 1.19 (10.31%)
Volume
AVERAGE VOLUME
5-Day
48,468
10-Day
32,490
30-Day
40,478
61,183
  • Prev. Close

    11.54

  • Open Price

    11.74

  • Bid Price (Qty.)

    12.05 (1000)

  • Offer Price (Qty.)

    12.65 (2000)

NSE Live

Sep 25, 15:56
12.65 1.10 (9.52%)
Volume
AVERAGE VOLUME
5-Day
180,532
10-Day
147,809
30-Day
315,626
661,900
  • Prev. Close

    11.55

  • Open Price

    11.65

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    12.65 (8737)

Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Auditor's Report

REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

We have audited the accompanying Standalone Ind AS financial statements of Patel Engineering Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including other comprehensive Income), the Cash Flow Statement, the Statement of Change in Equity for the year then ended, and a summary of the significant accounting policies, other explanatory information. These also includes financials of the Real Estate Division Branch of the company and Joint operations (hereinafter referred to as “the Standalone Ind AS financial statements”).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Standalone Ind AS financial statements to give a true and fair view of the state of affairs (financial position), Profit and Loss (financial performance including other comprehensive income), cash flows and change in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards(Ind AS) specified under Section 133 of the Act read with relevant rules issued there under.

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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS, of the state of affairs of the Company as at March 31, 2018, and its Profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We invite attention to:

a) As per Section 71 of Companies Act, 2013 the Company has created adequate Debenture Redemption Reserve for the Secured Redeemable Non-Convertible Debenture issued by the Company. However, in terms of Section 71 read with Rule 18(7)(C) of Companies Share Capital and Debentures Rules, 2014, the Company has not made the required deposit/investment to secure the repayment of debentures. Our opinion is not qualified in respect of this matter.

b) The independent Branch Auditors of, Patel Engineering Ltd (Real Estate Division), have without qualifying their audit report on the Standalone Ind AS financial statement for the year ended 31st March 2018 have drawn attention with respect to:

i. Note No. 27(a) (i) regarding Bellona Developers Limited which ceased to be a subsidiary of the company from 30th March 2016 after invoking of Strategic Debt Restructuring (SDR). Previous, year, the management has decided to write off its investments along with outstanding loans after adjusting any dues against the same. Hence, the Company has written off Rs. 2.63 million (P.Y. Rs. 398.50 million) as irrecoverable dues.

ii. Note No. 44 regarding Company’s investment and loans and advances in Waterfront Developers Limited, where notice dated 04th June, 2015 was received from Government of Mauritius for the termination of Lease Agreement entered on 11th December, 2009 with Les Salines Development Limited (a step down subsidiary of Waterfront). In this case the process of Arbitration has been initiated with the Government of Mauritius.

Our report is not modified with respect to above matter.

Other Matters

a) The Ind AS financial statements of the Company for the year ended March 31, 2017, included in these standalone Ind AS financial statements, have been audited by the predecessor auditor who expressed a qualified opinion on those statement on July 24, 2017. Our opinion is not modified in respect of this matter.

b) The standalone financial results include the financial results of 8 unincorporated joint operations which have not been audited by their auditors, whose financial results reflect the Net Total Assets of Rs. 899.98 million as at 31st March 2018, Company’s Share in Total revenue after elimination is Rs.1,570.30 million, Total Profit (net) after tax of Rs. 225.21 million and total comprehensive income (net) of Nil for the year ended on that date, as considered in these standalone financial results. The separate set of financials of these joint operations for the year ended March 31, 2018 are prepared by the management in accordance with accounting principle generally accepted in India, including Ind AS. Our opinion in so far it relates to the amounts and disclosure in respect of these joint operations is solely based on the report of the management certified accounts. Our opinion is not qualified in respect of this matter.

c) The standalone financial results also include the financial results of 4 unincorporated joint operations which have been audited by other auditors, whose financial results reflect the Net Total Assets of Rs. (2.91) million as at 31st March 2018, Company’s Share in Total revenue after elimination is Rs. 29.66 million, Total loss (net) after tax of Rs. (1.40) million and total comprehensive income (net) of Nil for the year ended on that date, as considered in these standalone financial results. The separate set of financials of these joint operations for the year ended March 31, 2018 are in accordance with accounting principles generally accepted in India, including Indian Accounting Standards (Ind AS) and which have been audited for the year by the other auditors under generally accepted auditing standards applicable in India.

Our opinion in so far it relates to the amounts and disclosure in respect of these joint operations is solely based on the report of the other auditors. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1) As required by ‘the Companies (Auditor’s Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in paragraphs 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 best of our knowledge and belief were necessary for the purposes of our audit;

b) 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) on the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

f) 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” to this report;

g) with respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. the Company has disclosed the impact of pending litigations as at March 31, 2018 on its financial position in its Standalone Ind AS financial statements to the extent determinable/ascertainable. - Refer Note 45 to the Standalone Ind AS financial statements;

ii. the Company has made provision as at March, 31,2018 as required under the applicable law or accounting standard, for material foreseeable losses, if any, on long term contract.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENT OF PATEL ENGINEERING LIMITED

Referred to in paragraph 1 under “Report on Other Legal and Regulatory requirement” section of our report of even date.

i (a) The Company has maintained proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) During the year, fixed assets have been physically verified by the management at regular intervals and no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us by the management, the title deeds of immovable properties included in property, plant and equipments / investment properties are held in the name of the Company, except for Freehold lands with gross block and net block of Rs. 7.13 millions.

ii. As explained to us, the Inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

iii. According to information and explanation given to us, the Company’s has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnership firm or other parties, covered in the register maintained under section 189 of the Companies Act 2013. Accordingly Paragraph 3 (iii)(a), 3 (iii)(b) and 3(iii)(c) of the Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013, to the extent applicable, in respect of the loans, investments, guarantees and security.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly Paragraph 3(v) of the Order is not applicable to the Company.

vi. We have broadly reviewed the books of accounts maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub section (1) of section 148 of the Companies Act in respect to company’s products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records.

vii(a) According to the information and explanations given to us and for the records of the Company examined by us, undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales tax, Service Tax, duty of Custom, duty of excise, Value Added Tax, Cess, goods and service tax (GST) and other statutory dues, as applicable, have been generally regularly deposited with the appropriate authorities except for the Sales Tax, Entry Tax, Service Tax and Municipality Tax amounting to Rs 373.03 million outstanding as at 31st March 2018 for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Particulars

Financial Year to which amount relates

Amounts in Million (Rs.)

Forum where dispute is pending

The Sales Tax Act

2001-2002 to 2003-2004

14.99

Appellate Tribunal

2005-2006, 2006-2007 and 2012-2013

19.16

Appellate Tribunal, Kolkata

2007-2008 to 2011-12

41.92

W.B.C.T. Appellate and Revisional Board, Kolkata

2007-2008

10.69

Deputy Commissioner Appellate -III, Mumbai

Entry Tax

2015-2016

6.95

Joint Commissioner of Commercial Tax (Appeals)-Central division Patna

The Finance Act, 1994

2007-2008 to 2012-2013

323.20

April 2003 to July 2006

2.54

October 2009 to September 2010

108.31

Custom, Excise and Service Tax

June 2007 to September 2009

651.88

Appellate Tribunal (CESTAT)

April 2010-March 2013

623.22

April 2013 to March 2015

17.96

The Income Tax

2003-04 to 2006-07

220.33

Hon’ble High Court

Act,1961

2011-12

169.99

Commissioner of Income Tax (Appeals)

2013-14

154.28

Income Tax Appellate Tribunal

2014-15

263.15

Commissioner of Income Tax (Appeals)

2015-16

114.73

Commissioner of Income Tax (Appeals)

Provident fund

2008-09, 2009-10 & 2010-11

7.14

Hon’ble High Court

Custom Duty

2011-2012

9.16

CESTAT, Chennai

With respect to Independent Branch Patel Engineering Ltd (Real Estate Division)

The Finance Act, 1994

November 2009 to June 2012

404.69

Custom , Excise and Service Tax Appellate Tribunal

July 2012 to March 2014

41.49

April 2014 to March 2015

14.05

April 2015 to June 2017

54.14

Commissioner of Service Tax

Income Tax Act, 1961

2008-2009 to 2010-2011

Amount not quantified

2011-2012

1.22

Income Tax Appellate Tribunal

2012-2013

4.88

2013-2014

120.06

Commissioner of Income Tax

2014-2015

69.45

(Appeals)

viii There are no loans or borrowings payable to government. The Company has defaulted in repayment of following dues to the financial institution, banks and debenture holders during the year. However, these balances were paid before the balance sheet date.

Debenture Holders

Amounts in million (Rs. )

Particular

Days

Principal

Interest

Axis Bank Limited - Non-Convertible

>90

500

90.24

Corporation Bank - Non-Convertible

31-60

-

3.31

61-90

150

49.67

>90

-

7.1

UCO Bank - Non-Convertible

61-90

150

18.71

Syndicate Bank - Non-Convertible

61-90

100

-

>90

-

15.24

IDBI Bank Limited - Non-Convertible

61-90

150

38.1

>90

-

10.58

GIC - Non-Convertible

31-60

-

2.71

>90

-

5.39

Banks

Amounts in million (Rs.)

Particular

Days

Principal

Letter of Credit/Bank

Interest

Guarantees

Standard Chartered Bank

01-30

-

-

42.72

31-60

-

-

3.95

61-90

-

-

240.65

>90

93.04

-

21.03

DBS Bank Limited

01-30

-

-

63.2

31-60

-

-

51.98

61-90

2.25

-

144.91

>90

-

-

32.92

Indusind Bank Limited

01-30

-

-

12.99

31-60

29.88

-

0.48

61-90

29.88

-

6.91

>90

-

-

28.88

Corporation Bank

01-30

-

-

59.62

61-90

627.37

-

48.59

>90

-

-

17.46

Axis Bank Limited

01-30

-

63.58

81.62

61-90

417

231.11

315.97

>90

-

-

21.46

HDFC Bank Limited

61-90

16

-

0.22

>90

74.24

-

7.41

Canara Bank

01-30

-

-

18.33

31-60

-

-

17.4

61-90

-

-

54.69

Bank of Baroda

01-30

-

98.51

43.49

31-60

-

-

4.7

61-90

35.63

-

709.88

Bank of India

01-30

-

-

56.84

31-60

-

60

17.16

61-90

71.25

-

990.77

IDBI Bank Limited

01-30

-

45.73

78.36

31-60

-

-

44.47

61-90

-

-

591.3

Bank of Maharashtra

01-30

-

-

77.33

31-60

-

-

21.51

61-90

154.35

-

299.16

Ratnakar Bank Limited

01-30

-

-

8.08

31-60

-

-

1.11

61-90

-

-

4.95

>90

-

-

48.62

Dena Bank

01-30

-

126.34

129.19

31-60

250

50.14

39.1

61-90

37.5

-

354.04

>90

1,500.00

-

251.93

State Bank of India

01-30

-

-

2.69

31-60

-

-

2.11

61-90

10.34

-

17.85

>90

-

-

8.14

ICICI Bank Limited

01-30

-

-

74.95

31-60

-

-

11.28

61-90

93.6

902.91

205.25

Society General Bank

01-30

19.16

-

20.63

31-60

-

-

4.3

61-90

-

-

82.22

>90

-

-

1.32

Exim Bank

01-30

91.4

-

26.23

31-60

225

-

3.35

61-90

751.63

-

35.28

Equipment Finance Company

Amounts in million (Rs. )

Particular

Days

Principal

Interest

Srei Equipment Finance Ltd.

01-30

3.59

1.84

31-60

1.42

0.82

61-90

0.71

0.41

The Company has defaulted in repayment of following dues to the debenture holders during the year, which were not paid as at the balance sheet date:

Debenture Holders

Amounts in million (Rs. )

Particular

Days

Principal

Interest

LIC- Non-Convertible

1-30

-

8.56

>90

-

30.92

GIC- Non-Convertible

61-90

-

0.27

>90

100.00

0.63

ix According to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments).

x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Financial Statements and according to the information and explanations provided by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

xi. According to the information and explanations given to us, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanation given to us and based on our verification of the records of the Company and on the basis of review and approval by the Board and Audit Committee, the transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in the Standalone Ind AS financial statements as required by the applicable accounting standards.

xiv. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debenture except for allotment of optionally convertible debentures during the year to lenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) adopted by the Joint Lender’s Forum as stated in notes 27(d) to the standalone financial statements. In respect of the same, in our opinion, the Company has complied with the requirements of section 42 of the Act and Rules framed there under.

xv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with them during the year. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENT OF PATEL ENGINEERING LIMITED

Referred to in paragraph 2(f) under “Report on Other Legal and Regulatory requirement” section of our report of even date

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013.

1. We have audited the internal financial controls over financial reporting of Patel Engineering Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the Standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Other Matter

9. We did not audit the internal financial controls over financial reporting of the Independent Branch “Patel Engineering Limited (Real Estate Division). The internal financial control over financial reporting of this Branch has been audited by their independent auditor whose report has been furnished to us, and our opinion in so far as it relates to the internal financial control over financial reporting included in respect to Branch, is based solely on the report of their auditor.

Our opinion is not modified in respect of this matter.

For T. P. Ostwal & Associates LLP

Chartered Accountants

(Registration No. 124444W/W100150)

T. P. Ostwal

Partner

Membership Number: 30848

Mumbai,

May 28, 2018