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PAE Ltd.

BSE: 517230 Sector: Auto
NSE: PAEL ISIN Code: INE766A01018
BSE LIVE 15:40 | 13 Dec 7.58 -0.22
(-2.82%)
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HIGH

8.19

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NSE 14:40 | 13 Dec 7.40 -0.35
(-4.52%)
OPEN

7.40

HIGH

7.40

LOW

7.40

OPEN 8.19
PREVIOUS CLOSE 7.80
VOLUME 3432
52-Week high 18.90
52-Week low 7.25
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8.19
CLOSE 7.80
VOLUME 3432
52-Week high 18.90
52-Week low 7.25
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

PAE Ltd. (PAEL) - Auditors Report

Company auditors report

TO THE MEMBERS OF PAE LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of PAE Limited(‘the Company') which comprise the Balance Sheet as at 31 March 2017 the Statementof Profit and Loss the Cash Flow Statement for the year ended and a summary of thesignificant accounting policies and other explanatory information.

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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provision of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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 accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

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 the material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates 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 qualified audit opinion on the standalone financial statement.

Basis for Qualified Opinion

a) We draw your attention that Net Worth of the company is negative as on 31 March2017. It has incurred accumulated losses of Rs. 6172.90 lacs till March 31 2016 and lossof Rs. 530.39 Lakhs for the year ended making total accumulated loss of Rs. 6703.26 Lakhsas of March 31 2017. Despite this for the reasons mentioned in Note No. 39 of Notes tothe accounts the accounts have been prepared on going concern basis. This conditionindicates existence of a material uncertainty that may cast significant doubt about theCompany's ability to continue on a going concern basis. We don't have the appropriateaudit evidence to consider the Company to continue as going concern.

b) The balance of sundry debtors sundry creditors warranty receivables warrantypayables and warranty stock are subject to reconciliation and confirmation. We drawattention to Note No. 42 of Notes to the accounts.

Qualified Opinion

In our opinion except for the possible effects of the matters described in the Basisfor qualified opinion paragraph and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2017 and its loss and its Cash Flows for the yearended on that date.

Our opinion is not modified in respect of above matter.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (‘the Order')issued by the Central Government in terms of Section 143(11) of the Companies Act 2013we give in the "Annexure A" a statement on the matters specified in paragraphs 3and 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 purposes of our audit.

b) In our opinion except for the effects of the matter described in the Basis ofQualified Opinion paragraph above proper books of account as required by law have beenkept by the Company so far as 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) Except for the effects of the matter described in the Basis of Qualified Opinionparagraph above which may have an adverse effect on the functioning of the Company in ouropinion the aforesaid standalone financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) 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 B".

f) On the basis of the written representations received from the directors as on March31 2017 and taken on record by the Board of Directors none of the directors of thecompany is disqualified as on March 31 2017 from being appointed as a director in termsof Section 164(2) of the Act.

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 pending litigation which would impact its financial positionregarding non payment of dues as notices issued under Negotiable Instrument Act for chequebouncing amount involve Rs. 11.37 lacs and notice issued under SARFAESI Act by the Bankerfor Rs. 2170.78 lacs. Also Refer Note No. 33 to the Notes to the accounts- contingentliability

(ii) The Company does not have any long term contracts including derivative contractsfor which 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 requisite disclosure in its financial statements as toholding as well as dealing in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 which are in accordance with the books of accounts maintainedby the Company. (Refer Note No. 43 to the Notes to the accounts.)

For R.C. Vakharia & Co.
Chartered Accountants
Firm Reg. No. 111237W
Rohit Vakharia
Place: Mumbai Proprietor
Date: May 29 2017 Membership No. 033728

ANNEXURE A

Referred to in paragraph 1 under the heading ‘Report on other legal andregulatory Requirements' of our Report of even date on the financial statements forthe year ended on March 31 2017 of PAE Limited.

(I) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. The Fixed Asset Register is requiredto be updated of the location where the sale of assets has taken place.

(b) The fixed assets have been physically verified by the management during the yearand in our opinion the frequency of verification is reasonable having regard to the sizeof the company and the nature of its assets. No material discrepancies were noticed onsuch physical verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the company.

(ii) (a) The inventory has been physically verified during the year by the managementat reasonable intervals. The discrepancies noticed on verification between the physicalstocks and the book records were material and properly dealt with in the books of accountsby writing off the amounting to Rs. 32.29 Lacs.

(iii) The company has not granted any loans secured or unsecured to companies firmsLLP or other parties covered in the registered maintained under Section 189 of theCompanies Act 2013.

(iv) In our opinion the Company has complied with provisions of Section 185 and 186 ofthe Companies Act 2013 in respect of the Loan Guarantee Security and investments.

(v) The Company had accepted deposits prior to the commencement of Companies Act 2013.In terms of section 74(1)(b) of the Companies Act 2013 an amount of Rs. 155.08 lacs isunpaid including interest as at the year end. The Company has given consent on the requestof the Deposit holder to extend the period on the same terms and conditions. We areinformed that these matured deposits will be repaid as and when the cash flow of thecompany improved.

During the year the company has not accepted any deposits from public in terms ofsection 73 of the Companies Act 2013 and not consider Dealer deposit as Public Deposits.

We are informed that no order has been passed by Company Law Board or National CompanyLaw Tribunal or Reserve Bank of India or Court or any other tribunal.

Accordingly the Company has complied with the provisions of section 73 to 76 of theCompanies Act 2013.

(vi) We have been informed that the Company is not required to maintain cost recordsunder section 148(1) of the Companies Act 2013.

(vii) (a) According to the records of the Company Provident Fund Employees' StateInsurance Income-tax Sales-tax Service tax Custom Duty Excise Duty Value added taxCess and other material statutory dues applicable to it have not been regular indepositing during the year with the appropriate authorities.

The extent of the arrears of outstanding statutory dues as at the last day of thefinancial year concerned for a period of more than six months from the date they becamepayable as follows:

Outstanding Statutory Dues (more than six months) Amount
Labour welfare funds 255.00
Entry Tax 208488.00
Central Sales Tax 44136.00
Value Added Tax 4948809.00
Family Pension Fund 183872.00
Service Tax 275395.00
Tax Deducted at Source 268947.00
Provident Fund 508454.00
Staff ESIC 297662.00
Profession Tax 115092.00
Superannuation 138250.00
Staff Insurance 19081.00
Total 7008441.00

(b) According to the information and explanations given to us dues of income tax orsales tax or value added tax have not been deposited on account of disputes:

Name of the Statute Nature of Dues Period to which amount relates Amount (Rs. in lacs) Forum where dispute is pending
Central Sales Tax and VAT Act VAT CST penalty and interest 1992-93 3.05 Appellate Tribunal
Central Sales Tax and VAT Act VAT CST penalty and interest 1996-97 2001-02 till 2011-12 587.08 West Bengal Sales Tax
VAT Act VAT penalty and interest 2005-06 107.99 Asst. Commissioner
Various State VAT Act VAT penalty and interest 2006-07 3.80 Revisional Tax board/Asst. Commissioner
Various State VAT Act VAT penalty and interest 2007-08 37.13 Asst./Dy/ Commissioner / Appellate Tribunal/ Commercial Taxes Dept./Rev. Tax Board
Various State VAT Act VAT penalty and interest 2008-09 18.56 Asst./Dy/ Commissioner / Appellate Tribunal
Central Sales Tax & Various State VAT Act VAT CST penalty and interest 2009-10 44.47 Asst./Dy/ Commissioner / AppellateTribunal
Central Sales Tax & Various State VAT Act VAT CST penalty and interest Taxes Dept. 2010-11 153.78 Appellate Tribunal/ Commercial
Central Sales Tax & Various State VAT Act VAT CST penalty and interest 2011-12 48.21 Asst. Commissioner/ AppellateTribunal
Central Sales Tax & Various State VAT Act VAT CST penalty and interest 2012-13 26.53 Asst. Commissioner/ Commercial Taxes/Appellate Dept.
Central Sales Tax CST 2013-14 17.61 Asst. Commissioner/ Commercial Taxes
Total 1048.23
Income tax Act Disallowance u/s 14A 2012-13 142 CIT(A)
Income tax Act Disallowance u/s 14A 2014-15 123.17 CIT(A)

Disputed demand details are not available for verification. Amount as certified by themanagement.

(viii) According to the information and explanations given to us the Company hasdefaulted in repayment of dues to State Bank of India & Corporation bank. The Leadbanker SBI has issued notice under SARFAESI Act to recover the dues. Notice issued underSARFAESI Act by the Banker for Rs. 2170.78 lacs. The bankers have taken symbolicpossession of the property and filed a securitization application in District MagistrateCourt Thane.

The Company does not have any outstanding debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer hence the provision of the clause (ix) of the Order is not applicable to theCompany.

(x) According to the information and explanations furnished by the management whichhas been relied upon by us there were no frauds on or by the Company or no fraud on theCompany by its officers/ employees has been noticed or reported during the year.

(xi) The Company has complied with the requisite approvals mandated by the provisionsof section 197 read with schedule V to the Companies Act 2013 in paying/providingmanagerial remuneration.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of Companies Act 2013 where applicableand the details have been disclosed in the Financial Statements as required by theapplicable accounting standards and Companies Act 2013.

(xiv) During the year the company has not made any preferential allotment of shares andhence the provision of the clause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with directorsor persons connected with him and hence provisions of Section 192 of Companies Act 2013are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For R.C. Vakharia & Co.
Chartered Accountants
Firm Reg. No. 111237W
Rohit Vakharia
Place: Mumbai Proprietor
Date: May 29 2017 Membership No. 033728

Annexure B to the Auditor's Report

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 PAELimited (‘the Company') as of 31 March 2017 in conjunction with our audit of thestandalone financial statements of the company for the year ended on the date.

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 (‘ICAI').Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls the were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the company's policies the safeguardingof its assets the prevention and detection of Frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the companies Act 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the 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 issued by ICAI And deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable about whether adequate internal financialcontrols over financial reporting were established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control system over financial reporting and there operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial control 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statement whether due to fraud or errors.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the the Company's internal financial controlssystem over 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 purpose 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 details 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 statement inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations of themanagement and directors of the company and; (3) provide reasonable assurances regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statement.

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 misstatement due to error or fraud may occur and not be detected. AlsoProjections of any evaluation of the internal financial controls over financial reportingto future period are subject to the risk that the internal financial controls overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

In our opinion the Company has in all material respects and adequate internalfinancial control system and the internal control system adopted by the Company hasadequate risk management and assessment system but in company's perspective theeffectiveness of said system is less effective in respect to warranty claimreceivable/payable and statutory compliances as Company does not have internal auditorCompany Secretary and Qualified Accountant. Further an adequate internal financialcontrols system were operating effectively as at March 31 2017 however it is required tobe strengthen based on the internal control 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 Institute ofChartered Accountants of India.

For R.C. Vakharia & Co.
Chartered Accountants
Firm Reg. No. 111237W
Rohit Vakharia
Place: Mumbai Proprietor
Date: May 29 2017 Membership No. 033728