THE MEMBERS OF
Report on the Financial Statements
We have audited the accompanying financial statements of P.M.TELELINNKS LIMITED("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the 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 financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provision of the Act for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under. We conducted our audit in accordancewith the Standards on Auditing specified under section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmis-statement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accounting^estimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its Profits and its cash flows for the year ended on that date.
Report on other 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 sub-section (11) ofsection 143 of the Companies Act 2013 and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanation given to us we give in the "Annexure 1" a statement on the mattersspecified in paragraphs 3 & 4 of the Order to the extent applicable.
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 purposes of our audit
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms ofSection 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls we give ourseparate Report in "Annexure 2".
g) 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 litigations on its financialposition in its financial statements - Refer Note 25 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The Company has provided proper disclosure in its financial statements in respectof holdings as well as dealings in Specified Bank Notes during the period from 08thNov 2016 to 30th Dec 2016 and these are in accordance with the books ofaccounts maintained by the company.
FIRM NO. 104019W
Annexure 1 to the Independent Auditors' Report
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
(i) In respect of its fixed assets:
(a) The company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.
(b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable having regardto the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.
(c) The title deeds of immovable properties recorded in the books of account of theCompany are held in the name of the Company.
(ii) The inventory has been physically verified by management during the year. In ouropinion the frequency of verification is reasonable. As informed no materialdiscrepancies were noticed on physical verification carried out during the year.
(iii) As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore provisions of sub clause (a) (b) and(c) of clause (iii) of paragraph 3 of the Order are not applicable to the Company.
(iv) As per the information and explanation given to us in respect of loansinvestments guarantees and securities the Company has complied with the provisions ofSection 185 and 186 of the Act.
(v) In our opinion and according to the.information and explanations given to us theCompany has not accepted any deposits from the public within the provisions objections 73to 76 of the Act and the rules framed there under. Therefore the provisions of clause ;(v)of paragraph 3 of the Order are not applicable to the Company.
(vi) As per the information and explanations .given tq.us in respect of the class ofindustry in which the Company falls the maintenance of cost records4ias rf6t beqnprescribed by the Central Government under sub-section (1) of section 148 of the CompaniesAct-2013.Therefore the provisions of clause (vi) of paragraph 3 of the Order are notapplicable to the Company.
(vii) In respect of statutory dues:
(a) The company is regular in depositing with appropriate authority undisputedstatutory dues including provident fund employee's state insurance income tax salestax service tax duty of customs duty of excise value added tax cess and any otherstatutory dues applicable to it with the appropriate authorities. According to theinformation and explanations given to us no undisputed amounts payable in respect ofabove dues were in arrears as at 31st March 2017 for a period of more than six monthsfrom the date they became payable.
(b) According to the information and explanations given to us there are no dues ofsales tax custom duty excise duty or cess which have not been deposited on account ofany dispute.
(viii) According to the information and explanation given to us the Company has nottaken loan from any financial Institution bank and government or has no dues to debentureholders. Therefore the provisions of clause (viii) of paragraph 3 of the Order are notapplicable to the Company.
(ix) The Company has neither raised money by way of public Issue offer nor has obtainedany term loans. Therefore the provisions of clause (ix) of paragraph 3 of the Order arenot applicable to the Company.
(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 andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.
(xi) The Company has not paid/provided managerial remuneration. Therefore question ofobtaining approvals mandated by the provision of section 197 read with schedule V to theAct does not arise.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause (xii) of paragraph 3 of the Order are not applicable to the Company.
(xiii) As per the information and explanation given to us all transactions enteredinto by the Company with the related parties are in compliance with Sections 177 and 188of Act where applicable and the details have been disclosed in the Financial Statementsetc. as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforethe provisions of clause (xiv) of paragraph 3 of the Order are not applicable to theCompany
(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with him. Therefore the provisions of clause (xv) of paragraph 3 of theOrder are not applicable to the Company.
(xvi) As per the information and explanation given to us the Company is not required tobe registered under Section 45-IA of the Reserve Bank of India Act 1934.
FOR N.K. JALAN & CO.
FIRM NO. 104019W
Membership No.O 11878
Annexure 2 to the Independent Auditors' Report
(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
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 ofP.M.TELELINIMKS LIMITED ("the Company") as of 31st March 2017 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibilitvfor 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 IndisJ'TCAr). 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-tp company's policies the safeguarding of its assets theprevention 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.
Our responsibility is to express an opinion on tire Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a 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 process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions-anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in ail material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
FOR N.K. JAL4N & CO.
FIRM NO. 104019W
Accompanying notes to the financial statements for the year ended 31st March 2017 1.SIGNIFICANT ACCOUNTIG POLICIES
(i) Basis of Preparation of financial statements:
The financial statements have been prepared in accordance with Indian GenerallyAccepted Accounting Principles (GAAP) under the historical cost convention on the accrualbasis except for certain financial instruments which are measured at fair values. GAAPcomprises mandatory accounting standards notified under section 133 of the Companies Act2013 read together with Rule 7 of the Companies (Accounts) Rules 2014 the provisions ofthe Companies Act 2013 and guide lines issued by the Securities and Exchange Board ofIndia (SEBI). Accounting policies have been consistently applied except where a newlyissued accounting standard is initially adopted or a revision to an existing accountingstandard requires a change in the accounting policy hitherto in use or differentaccounting policy is required by statute.
(ii) Use Of Estimates:-
The presentation of financial statements in conformity with the generally acceptedaccounting principal requires estimates and assumptions to be made. That affects thereported amount of assets and liabilities on the date of the financial statements and thereported amount of revenues and expenses during the reporting period. Difference betweenthe actual result and estimates are recognized in the period in which the results areknown/materialized.
(iii) Fixed Assets:-
Fixed Assets are stated at cost less accumulated depreciation. Cost is inclusive offreight duties (net of tax credits as applicable) levies and any directly attributablecost of bringing the assets to their working condition for their Intended use.
(iv) Depreciation & Amortisation:-
Depreciation on fixed assets is provided to the extent of depreciable amount on thewritten clown value (WDV). Depreciation is provided based on useful life of the assets asprescribed in schedule II of the Companies Act 2013.
Long term investments are stated at cost. Provision for diminution in value ofLong-term investment is made only if such decline is other than temporary in the opinionof management. Investments other than long term investments being current investments arevalued at cost or fair value whichever is lower
The valuation of the inventory was done according to the accepted accountingprinciples i.e. at Cost or Market realizable Value whichever is lower.
A provision is recognized when an enterprise has a present obligation as a result ofpast events and it is probable that an outflow of resources will be required to settle theobligation in respect of which a reliable estimate can be made. Provision are determinedbased on management estimate require to settle the obligation at the balance sheet date.These are reviewed at each balance sheet date and adjusted to reflect the currentmanagement estimates.
(viii) Treatment Of Contingent Liabilities:-
Contingent liabilities are disclosed by way of notes. Provision is made in the accountsfor those liabilities which are likely to materialize after the year end till thefinalization of accounts and having effect on the position stated in the balance sheet asat the year end.
Provision for taxation has been made in accordance with the rates of Income Tax Act1961 prevailing for the relevant assessment year.
Sales are recognized net of returns and trade discounts on dispatch of goods toCustomers and are reflected in the accounts at gross realizable value