PETRON G! wes Petron Engineering Construction Limited PECL/NS/LEGAL/BSE-NSE/UFR/2017 February 14, 2017 To: To: The Secretary - The Listing Department BSE Limited , PJ Towers 25" Floor, Dalal Street, Mumbai 400 001. Dear Sir / Madam, Sub: Unaudited Financial Results for the Quarter and Nine Months Ended 31° December, 2016 and Limited Review Report We are sending herewith the Unaudited Financial Results for the quarter and nine months ended 31 December, 2016, alongwith Limited Review Report dated 14" February, 2017, by M/s. Lodha & Co., Chartered Accountants, New Delhi, Auditors of the Company, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Kindly take the aforesaid Unaudited Financial Results and Limited Review Report on your records. Thanking you, Yours faithfully For PETRON ENGG. CONSTN. LTD., a NARESH SHAH SR. V. P. (LEGAL) & COMPANY SECRETARY Encl: as stated Nvs.rr Registered Office: 6th Floor, Swastik Chambers, Sion-Trombay Road, P.B. No. 7206, Chembur, Mumbai - 400071, India Tel: +91-22-4085 6200 Fax: +91-22-4085 6250 / 6797 3509 Email: corporate @ petronenginoering.com * Website: www.petronengineering.com CIN: Laszo2MHt976PLCO19135 “Accredited with IMS complying with ISO £00 2008, 180 14001:2004, OHSAS 18001:2007 "Petron Engineering Construction Limited ei oie 6h Foy, SwastiChanbers army Rox, Cheb, Mumba 40071 ‘ana o4.22408 208 ach o-22 408 4250 Emal opuratperneyieringcom West: wn etrneginerng com, CLA ARMINSTEPLHINS| [EXTHACT OF UNAUDITED RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER, 2016, pees Loe Parcs ‘GuarierEnaed ‘ine Monte ae Year Ended DERI [308 Seber | SDB | Heber | IH DI in ar 076 “Tw name rom operons (Nt) 964 ao. ro200 esi 51969 aan Prien rom ody aces ae at ts son] 1% wo 6 a Prats mcr acter ser a te ntraorinary ems) ‘os ‘a0 170 ‘70 16 86 uty hare Case me 14 m0 4 14 14 (GI toncand shed EPSbtorexroory tens gal (ao 226 (62a saz sn (6) Bhocand ied ES ser Breriary ee aa (an 25 {2a sh a Notes 1 Theabove faancl ests have been elewed bythe Audit Comite an then aproved by he 2 The Companys pinary engaged inthe busines of-Engineering Procurement & onstruction” and operates na single busines seen based onthe nature he products and 2a During the pero, esasing oer has dellowed tax creditof Ra 72.97 laespataing AY 204-1 [38 Tax expense forthe perio net otax expense o earlier years amounting Rs 5722 lacs 18. The company follwing up wih rated customers for recovery fs amount “ator? Qualifeation aa aR a) in resp of eran suspended delayed contract, ar of st Dee 2016, wade receable a1.775 tae (net of provisions and mobilzation advance of Rs. 2934 lcs) (quarter ended 300 [spe 2016, wade receivables of B82Slas and Sit De 2015 RS:.128 las net of provisions [in mobieaton advance oF Re 294 les and R21 les respective) FY ended 3st Mare Js 1923 lcsne of provisions and mobilzation advance of R034 lcs}andunbied revenue las2seiacs (Soe Sept 2016Rs. 6256lacs and 31st Doe 2015 RS7.80SIc8\ FY ended 31 Marcv'16 Re. 6256) are doubt of recovery andthe balances recelables rom the customer are pending anfimatian/ negotiation Further, the Wale payables aggregated to Re 81 Slacs (300 sept 2016 and 3st Dec 2015 Rs. B15 lcs and Rs 1.206 lacs respecte) ended 3st Mare] [Re 019 las) In respect of shove mentioned contracts are alsa subject to Final negottin/| |snfiation. We are unable to comment upon the satus of amount rectvabls/ payables othe] reported los for the three months/nine montspeiod ended on 3ist Dec 2016 and ts [srerpondingimpscton asst lables that date [his mata ws aso quali nour report on the franca resus for the year ended 3st Mare] /26,quarter/ nine months period ended 31st Dec 2015 and in our limited review report fo he] quater sb months prod ended 30% Sep 2016, [the matter mainly relates toa meg projet (the largest private ivesinent ni] elon - wich s nearly 6085 complete, which had he roadblock because of the cost lscliton natural dsaser and nana constrains a the cents end. The compan] Jn meetings withthe chen wherein the cent has confemed that they In fascusstons wih various prospective Investors for fan suppor to restart th projec Consiering the developments, the managements confient that the projec] [wi estar nner fate Apar fromthe above the same ha abo bee reali by tne tp executives of he said caster. [As commented bythe autor intel report. on the raisin oF trae reciabls Jad unbiled revenue ofthe said projec the management ere informs tha | Jamoune outstanding in the frm of trade recevables Is pending negotiations wit sient andthe unbilrevenues re Inthe form of unfinished works and inventories] Jnost of which are marketable, if required. The management & conent of 1 recovery upon estar of he project in respec of trade receivables ad unbled even other contracts the company is negotiating eth the cents a scone of elation of those receeble. In he Jeurent yar at well asin the previous years the company was succesful i aeeng| seiements with clems which has resulted in reduction In unbled revenue/rad| recerabes. Farther the accounts payable are subject to the rconiton ofthe work performed at he said projec and an be accurately ascertained ater renegotiation upon rsa atthe projet or otherwise. 6 the ease maybe [GID The Company fax vacua venues of RW daring aver coded ist Bec 2016 and x 51 aes darig the nine mont period ended 31st Dee 2016 on account of cost overruns / can om certain contrat, which are notin accordance with the principles se uti the Accounting Standards AS-7 “Construction Contacts. cordingly, the Revente for nine months period higher by Rs. 33 lacs and lass for he nine months period ilower by Re 31 acs coy 2,922 ac of even recognised In car yeas on account of cost overruns / lan certain contacts which are not in accordance with the pines Set out Inthe Accounting} standards AS-7 “Construction Contact's stated above and consequently Balance In retained Jesrings and unbled revenue balance at at Ist Dee 2016 t higher by RaZ95Sac (asa lsousepe 2016: Rs. 2953tcy, as at Sist March 2016: RS 2922 las and asa 3st Dee 2015: ns2.929 bs) Iris mater wa als qualified nour report onthe nancial resus for the year ended 3st Mare fi, quartr/ nine months period ended 3st Dec 2015 and in our lined review teprt or the] quater st months prod ended 300 Sept 2016 Fire are contractual provision in some ofthe conracs Tor das agente] lay at predetermined rates per month as specled In the respective contacts lacorinly the Company has lodged cans forthe extended say. Further, during lexceution of works, sme ofthe spetiatons,seope and methodology of execution] have undergone changes for which change order requests have Been submited wi} lhe espectve cients [the company is negouating with dhe Cents and is confident of realsaon of those fs. ‘The previous pera / year gues have een regrouped/reclssite tome ther comparable with at of current prod / year wherever necessary. Mumba 40h February, 2017 For Petron Engineering Construction Limited el ‘Alay Hans ‘Mangog DirectorPetron Engineering Construction Li ited ‘Rege.Ofice: 6th Foor, Sask Chambers, Slon-Trombay Road, Chembur, Mumbal-40007 ‘el No.+91-22-4088 620, Fax No#91:22-4085 6260, Emallcorporate@petronengineering.com, Wobsie: ww petronengineering.com, CIN: LIS202MHISTEPLCOISI3S, ‘STATEMENT OF UNAUDITED RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER, 2016 Rupees in toes Particulars ‘Quarter Ended ‘Nine Months Ended ‘Year Endod tseDecember | 300hSeptember | 3tstDecember | 31st December | 31st December | 3st March 2016 2016 2015 2016 2015 216 (inaudited) | —inoudited) | —(naudited) | fUnaudited) | (Unaudited) | (audited) Thcome rom Operations (@) NetSales/income from Operations (net of service tax sales tax & excise duty) 9460 8697 02s 25,382 31,938 42188 (0) Other Operating Income 4 213, 16 235 31 36 “Total income Operations (Net oe wo10 T0260 76617 31868 aaron = Expenditure (@) Castof Materials Consumed 2399 2am 2.406 7286 8908 12598 (6) Changesin Projectinventories ‘ 7 * 1 18e 6 (6) Sub-contracting expenses 3526 2933 3590 9,608 9972 13258 (6) Employees Benes Expense 20s 1938 2078 5782 6326 {e} Depreciation and Amariation Expense ‘68 ‘7s ‘5 i 50 (1) Other expenditure 1,066. 1500 1346 3681 4097 Total 3.266, B04, 3.595 75.062 30,030 3 profit/(Lass rom Operations before Other income, Finance costand Exceptional items 198 106 665 155 asi 2294 4 Other income 160 7 151 786 70 682 5 Folsom ordinary aves before Finance Gostan Escepional a a ne a a 2976 Finance Cost 56 3o7 632 1887 3.885 2A89 7 Profit/(Loss) from ordinary aetivitiesafter Finance costs but before ines ass) ce (16) a ae Exceptional items {Exceptional items - 7 - : : : 9. Net Profit (Los) from ordinary activities before tax s0)| sa) 104 aa] 504 317 10 “Tax Expenses 6) 050) ry 45) 18 8 11. Net Profit/ (Loss) from ordinary activities after tax 233)| G04] 170 (70) 386 436 42. Extraordinary items (oetof taxes RSNI) - - : - - - 13. Net Proft/ (Lass) forthe period a3) Goa] 170 70) 306 436 114 Paidpequltysharecaptl (Face Value: Rs10/-per equity share) set 756 754 784 74 754 754 15. Reserve excluding Revaluation Reserves (ER * - - 15257 16 Earnings per Share (EPS) (of Rs 20/-each (not annualised) » (2) Basic and diluted EFS before Extraordinary items aa) (4.08) 226 62a] 512 579 (0) Gasicand eluted EPS after Extreordinary items { 43) (4.08 226 624) 512 579 ary \ a) 409) rsh are We rood11 Theabove financial results have boen reviewed by th Audit Commies and then approved by the Board of Directors at thelr respective mestingsheld on 1th February, 2017 and also Statutory Audicorshave cared out ited review ofthe same. 2. The Company's primarly engage in the business of "Engineering, Procurement & Construcion" atid ope and rerum ete. Accordingly, these nancial results have been prepare forts single segment ries ia single business segment based onthe nature ofthe products and services; the risks 53a Daring the period, assessing officer has disallowed tax craditofR572.97 las paitaning wo AY 2014-16. The company is following up with related customers for recovery of sa amount. Sb Taxexpense forthe peri isne of tx expense af aller years amounting to Rs. 57.22 lacs, 4 The Auditors have commantedon, ft fadlioe® Qualification Companys espns (a) la espe certain suspended / delayed contacts, sof $ist Dec 2016, wade ecalvable of R775 ac Inecor provisions and mabitationsdvane of Bs, 2934 las) (quarter ended 300 Sep 2036, wade reeivasles la Rs2siac and 3h Dec 2015 Ra.128 lacs, net of provisions ard mobilization advance of Rs, 2934 Ics nd] IAZiilesrespecsivey]( FY ended Sis March" Re 1,523 lacsnet of provisions and mobilen advance Is2934 tusland unbiled revenue of He62Scloes (0th Sept 2016Ks G2Sélacs and 41st Der 205] a7. a05acs}(F¥ ended tat MarehT6 Rs. 6256laes) are doubt recvery ad the balances ecelvablsfom| ne customers re pending cnfrmaten/ negotiation. Further, he rade payables aggregated to Rs Sls (30 Sept 2026 and 3st Dee 2015 Rs 61S les and Rs. 1206 lcs respeciveiy)(F ended 31st Marl’S6 Rs. 819 lx) In respac of above mentioned contacts are also subject tonal negotation/ conirmaton. We are able [comment upon the statis of amount rcelvabes / payables onthe reported los forthe thee mants/aine Imonthepriod ended on 3st Dee 2016 ends corzesponding iapacton assets / bites act that dts, | (Tis mata was slo quale nour report he inane resus forthe year ended StstMarch'16, quater nine months period ended Sst Der 2015 arin our Wimlted review repert forthe quartr / sx months peed fended 30x Sept 2016. tke matter wally relates to « aga project (the largest private lovestment in the region) ~| which is nearly 6086 complet, which had hia roadblock because ofthe cost escalation, natural disaster and financial constraints at the clients end-The company had meetings with theclient lwherain the client has confirmed that they are in discussions with various prospectve| lavescons for nancial suppore to restart the project. Considering the developments, thel Imanagerments confident thatthe project wil restart n near future. Apart from the above, th] fer ha also been eafirmed by the op executives ofthe sald customer. lAs commented by the auditors in thelr report, on the realzaton of trade receivables an junbited revenue of the. sald project, the management hereby informs tht the amout| joutstanding im the form of trade recsvables Is pending negotstons with cient and the linbiled revenues are inthe form of unfinished works and inventories, mast of which ar} marketable, f required. The managements confident ofits recovery upon restart ofthe projet. In respect of trade recevablee and unblled revenue of ether contrac, the company 5 Inegotsting with he dient and Is confident af roaistion of those receivable. in te curent |yer aswel asin the previous yeas, the company was successful in ariving setements with [ents which hae resulted in reduction in unblled revenve/trade receivables, Further, the acounts payables ae subject to the reconciation ofthe work performed atthe} [sai projeccand ean be accurately ascertained afer re-negticion upoa restartof the project otherwise asthe ease may be. [BVGD The Company has caged ravanaas ofa Wi ring qurir ended st Dee S0aeand Wa Siac ring the ine month period ended 31et Dee 2026 on acount feast overruns / lam on crtin contac, whith al not In accordance with the principles sat aut in the Accounting Standards AS ‘Consrston Contracts IAcordingy, the Revenue for nine month pri is Mgher by Rs. 31 acs and los fr the nine months peti i lower bys. 34 las en00 Re2.972 tas of revenue recognized in eal years , on account of east overuts/ lam on carte Jorracts, whlch are notin acardance withthe principles se out in he Accounting Standards AS-7 Constr] [Contac stated shove and consequent balance esined earsings and ubiledreven balance as ar 3st Dee 2010 ishigharhy a2, 05sace (ar at 3UHSept 2016 Rs. 2953s, aya st March 2016 Rs 2.922 lassi eae Hise Dec 2018: 86.2929 las). Iris mater was alse quae incur ropoct on the inancial results fr theyenr ended 3ist March '16, quarter} Inine month period ended 31etDee 2015 and in our Intel review report fr the quarter sir mort period] lcded 30t Sapt 2016 Tere are contractual provisions n soma fhe contracts for aims against extended stay at [determined rates per month as specified io the respective conracs. Accordingly the Compaay| has lodged caine for the extended stay. Further, Curing execution of works. some of the] sptcfcasons, scope and methodology of execution ave undergone changes for which chang} order requests have been submited with te respective lens the Company is negotiating withthe Cents and is confidencof realisation of those aims. 14th February, 2017 rerroroe rns oe Rayan aLODHA 12, Bhagat Singh Marg, New Delhi - 110 001, India Telephone :91 11 29710176 / 23710177 | 25384671 / 2414 &CO Fax 91.11 23345168 / 23314309 Esme: dethi@ledhaco.com Chartered Accountants Limited Review Report To ‘The Board of Directors, Petron Engineering Construction Limited ‘ort for the Quarter /Nine months period ended 31* Dec’ 2016 1. We have reviewed the accompanying statement of unaudited financial results (the “Statement”) of Petron Engineering Construction Limited (the "Company”) for the quarter and nine months ended 31 December 2016. This Statement is the responsibility of the Company's management and has been approved by the Board of Directors in their meeting held on 14% February 2017. Our responsibility is to issue a report on the Statement based on our review. 2, We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial Statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. 3. Basis for Qualified Conclusion {) Note no. 4{a) of the accompanying unaudited statement of financial results in respect of certain suspended / delayed contracts, as of 31* December 2016, trade receivable of Rs. 1,775 lacs (net of provisions and mobilization advance of Rs. 2,934 lacs) (quarter ended 30‘ September 2016, trade receivables of Rs. 1,823 lacs and 31* December 2015 Rs, 1,128 lacs, net of provisions and mobilization advance of Rs. 2,934 lacs and Rs. 4211 lacs respectively) (FY ended 31s March 16 Rs. 1,923 lacs, net of provisions and mobilization advance of Rs, 2,934 lacs) and unbilled revenue of Rs. 6,256 lacs (30" September 2016 Rs. 6,256 lacs and 31% December 2015 Rs. 7,805 lacs) (FY ended 31* March 2016 Rs. 6,256 lacs) are doubtful of recovery and the balances receivables from the customers are pending confirmation/ negotiation, Further, the trade payables aggregated to Rs. 815 lacs (30" September 2016 and 31* December 2015 Rs, 815 lacs and Rs. 1,206 lacs respectively) (FY ended 31** March Kolkata Mumbsi New Delhi Chennai Hyderabad Jaipuri) 2016 Rs. 819 lacs) in respect of above mentioned contracts are also subject to final negotiation/ confirmation. We are unable to comment upon the status of amount receivables / payables on the reported loss for the three months/nine months period ended on 31% December 2016 and its corresponding impact on assets / liabilities as at that date. ‘This matter was also qualified in our report on the financial results for the year ended 31st March 2016, quarter/ nine months period ended 31* December 2015 and in our limited review report for the quarter / six months period ended 30 September 2016, (a) As stated in Note no. 4 (b)(i) of the accompanying unaudited financial results, the Company has recognised revenues of Rs, Nil during quarter ended 31% December 2016 and Rs. 31 lacs during the nine months period ended 31% December 2016, on account of cost overruns / claim on certain contracts, which are not in accordance with the principles set out in the Accounting Standards AS-7 ‘Construction Contracts’. ‘Accordingly, the Revenue for nine months period is higher by Rs. 31 lacs and (loss) for the nine months period is lower by Rs. 31 lacs, (b) Asstated in Note no. 4 (b)(il) Rs. 2,922 lacs of revenue recognized in earlier years, on account of cost overruns / claim on certain contracts, which are not in accordance with the principles set out in the Accounting Standards AS-7 ‘Construction Contracts’ and consequently balance in retained earnings and unbilled revenue balance as at 31% December 2016 is higher by Rs. 2,953 lacs (as at 30% September 2016 by Rs. 2,953 lacs, as at 31s* March 2016 Rs. 2,922 lacs and as at 31 December 2015 by Rs. 2,929 lacs). This matter was also qualified in our report on the financial results for the year ended 31% March 2016, quarter/ nine months period ended 31 December 2015 and in our limited review report for the quarter/ six months period ended 30" September 2016. . Except for the possible effect of the matters stated in paragraph 3 (1) and (li) under the heading ‘Basis for Qualified Conclusion’ above, based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying statement of unaudited financial results prepared in accordance with applicable accounting standards and other recognised accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including the manner in which it is to be disclosed, or that it contains any material misstatement. Emphasis of Matter Attention is drawn to:1) Regarding pending confirmation /reconciliation of balances of certain trade receivable, unbilled revenue, other liabilities and loan & advances as at 31 December 2016, where the management is confident that there will not be any material impact on confirmation /reconcillation on loss for the quarter/ nine months period ended 31 December 2016. In case of certain pending/ delayed projects estimated costs to completion are based upon management estimates and where the management is confident that there will not be any material impact on completion of worlk in future. Our conclusion is not modified in respect of matters stated above. For LODHA & CO., Chartered Accountants Firm Registration No. - 301051E az Lodha) Partner M No. 507462 Place: New Delhi Date: 14! February 2017