To the Members of
M/s. PAN Electronics (lndia) Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of PAN Electronics (India)Limited ("the Company") which comprise the Balance Sheet as at 31 March 2015the Statement of Profit and Loss and the Cash Flow Statement for the year then ended anda summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. The Company's Board of Directors are responsible for the matters stated in Section13a(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give true and fair view of thefinancial position financial performance 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 provisions of the Act for safeguarding the assets of the Company and for preventingand detecting 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 accounting recordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatements whether due to fraud or error.
3. Our responsibility is to express an opinion on these financial statements based onour audit.
4. 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 thereunder.
5. 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.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the 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 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 the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Board of Directorsas well as evaluating the overall presentation statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Basis for qualified opinion
8. The balances appearing under other long term liabilities trade payables andcertain advances made by the Company are subject to confirmations and reconciliation.Accordingly in absence of such confirmations and reconciliation of balances we are notin a position to ascertain the impact on the statement of profit and loss.
9. In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in paragraph 8 of thebasis for qualified opinion paragraph the aforesaid 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 31 March 2015 and the losses for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditor's Report) Order 2015 ('the Order') issued bythe Central Government in terms of Section 143(11) of the Act we give in the Annexure astatement on the matters specified in paragraphs 3 and 4 of the Order.
11. 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 Cash Flow Statement dealtwith 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 31March 2015 taken on record by the Board of Directors none of the Directors isdisqualified as on 31 March 2015 from being appointed as a Director in terms of Section164 (2) of the Act;
f) With respect to the other matters to be included in the Auditors' 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 as of 31 March 2015;
ii. The Company has made provision in its financial statements as required under theapplicable law or accounting standards for material foreseeable losses on long termcontracts;
iii. The Company has not declared any dividend in the past or has any unpaid dividendthus the clause on transferring of unpaid dividend to the Investor Education andProtection Fund is not applicable
For MSRK & Co
Firm Registration Number: 013232S
Shreeshkumar Eshwar Hegde
Membership Number: 222817
Date: 30 May 2015
Annexure to the Auditor's 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 the fixed assets of the Company:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets have not been physically verified during the year by theManagement however there is a regular programme of verification which in our opinionprovides for physical verification of the fixed assets at reasonable intervals. ln absenceof physical verification of the fixed assets we are unable to comment on thediscrepancies if any pertaining to fixed assets.
ii) In respect of the inventories of the Company:
a) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals.
b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
c) In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.
iii) The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the Register maintained under Section 189 of the Act.
iv) In our opinion and according to the information and explanations given to us thereis an adequate internal control system commensurate with the size of the Company and thenature of its business with regard to purchase of inventory and fixed assets and the saleof goods and services. During the course of our audit we have not observed any majorweakness in such internal control system.
v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits during the year and does not have any unclaimeddeposits. Therefore the provisions of the clause 3 (v) of the Order are not applicable tothe Company.
vi) The provisions of clause 3 (vi) of the Order are not applicable to the Company asthe Company is not covered by the Companies (Cost Records and Audit) Rules 2014. vii)According to the information and explanations given to us in respect of statutory dues:
a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Sales Tax Wealth Tax Service Taxduty of Customs duty of Excise Value Added Tax Cess and other material statutory duesapplicable to it except income Tax with the appropriate authorities.
The extent of arrears of outstanding undisputed statutory dues as at the last day ofthe financial year concerned for a period of more than six months from the date theybecome payable are as follows:
|Name of Statute ||Particulars of statutory dues ||Amount in Rs ||Period to which the amount relates ||Due Date of Payment ||Remarks |
|Income-tax Act. 1961 ||Withholding of taxes ||26647 ||March 2014 ||Within 30 of April 2014 ||Taxes not paid |
|Income-tax Act. 1961 ||Withholding of taxes ||10470 ||Upto September 2014 ||Within 7th of subsequent month ||Taxes not paid |
b) There are no amounts in respect of income tax sales tax wealth tax service taxduty of customs value added tax and cess that have not been deposited with theappropriate authorities except duty of excise on account of any dispute. Howeveraccording to the information and explanation given to us the following dues of duty ofexcise have not been deposited by the Company on account of dispute:
|Name of Statute ||Particulars of statutory dues ||Amount in Rs ||Period to which the amount relates ||Forum where dispute is pending |
|Central Excise Act 1944 ||Availment of CENVAT Credit ||115000 ||Financial Year 2002-03 ||CESTAT - Chennai |
c) The Company has not declared any dividend in the past or has any unpaid dividendtherefore the clause is not applicable.
viii) The Company has accumulated losses at the end of financial year which exceedsfifty percent of its net worth. The Company has incurred cash losses in the financial yearand the Company has not incurred any cash losses in the immediately preceding financialyear.
ix) The Company has no dues payable to a financial institution or bank or debentureholders during the year therefore the provisions of the clause 3 (ix) of the Order arenot applicable to the Company.
x) In our opinion and according to the information and explanations given to us theCompany has not given any guarantee for loans taken by others from bank or financialinstitutions the terms and conditions whereof are prejudicial to the interest of theCompany.
xi) According to the information and explanations given to us the Company did notavail any term loan during the year.
xii) To the best of our knowledge and belief and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Company hasbeen noticed or reported during the year.
For MSRK & Co
Firm Registration Number: 013232S
Shreeshkumar Eshwar Hegde
Membership Number: 222817
Date: 30 May 2015
AUDITORS REPORT ON CORPORATE GOVERNENCE
TO THE MEMBERS OF PAN ELECTRONICS (INDIA) LIMITED
Nominal Capital: Rs. 4 crores
We have examined the compliance of conditions of Corporate Governance of PanElectronics (India) Limited for the year ended March 31 2015 as stipulated in Clause 49of the Listing Agreement of the said Company with Stock Exchanges in India.
The compliance conditions of Corporate Governance are the responsibility of theManagement. Our examination was limited to procedures and implementation thereof adoptedby the Company for expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and explanation given to us wecertify that the Company has complied with the conditions of Corporate Governance asstipulated in the above mentioned Listing Agreement.
We state that no investor grievance is pending for a period exceeding one month againstthe company as per the records maintained by the Shareholders/Investors grievancecommittee.
We further state that such compliance is neither an assurance as to the futurevisibility of the Company nor the efficiency or effectiveness with which the Managementhas conducted the affairs of the Company.
| ||For MSRK&CO |
| ||Chartered Accountants |
| ||Firm Registration Number: 013232S |
|PLACE: Bangalore ||SHREESH KUMAR ESHWAR HEGDE |
|DATE: 30 May 2015 ||PARTNER |
| ||Membership Number: 222817 |