To the Shareholders of
PUNJAB ALKALIES & CHEMICALS LIMITED
Report on the Financial Statements:
1. We have audited the accompanying financial statements of Punjab Alkalies &Chemicals Limited which comprise the balance sheet as at 31st March 2017 andthe Profit and Loss Statement and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements:
2. 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) Rule 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 judgement 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.
3. Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder.
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.
4. An audit involves performing procedures to obtain audit evidence about theamounts and 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Directors as well as evaluating the overallpresentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
6. 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:
(a) In the case of the Balance Sheet of the state of affairs of the Company as atMarch 312017;
(b) In the case of the Profit and Loss Statement of the loss for the year ended onthat date;and
(c) In the case of the Cash Flow Statement of the Cash Flows for the year ended onthat date.
Emphasis of Matter
7. We draw attention to the following Note in the financial statements:
"Note No. 1 (a): The financial statements are prepared under the historicalcost convention and on the basis of going concern. Accumulated losses have resulted inerosion of net worth of the Company. The financial statements have been prepared on agoing concern basis on the strength of continued support of thepromoters financialinstitutions and banks. The Company has filed a reference before the Board for Industrialand Financial Reconstruction (BIFR). BIFR has registered the company's reference as Sick
Industrial Company as Case No. 152/2015. With SICA stands repealed w.e.f. 01.12.2016BIFR also stands dissolved w.e.f. 01.12.2016. At the request of Company CDR EmpoweredGroup has sanctioned conversion of outstanding loan amount of Rs.4286 lacs into 6605246Equity Shares as per SEBI Formula i.e. @ Rs.22.95 (Face Value Rs.10/- per share) and FullyConvertible Debentures (FCDs) amounting to Rs.2770 lacs. It was further provided that theCompany will issue Non-Convertible Debentures (NCDs) to CDR Lenders to the extent of Markto Market Loss in respect of fresh Equity issued by PACL. These FCDs and NCDs shall bearcoupon rate equivalent to IDBI base rate as on 30th June 2015 i.e. 10% p.a. CDR EGfurther approved waiver of interest on outstanding O.T.S. amount during period April toJune 2015. The Company has received sanction from all the financial institutions andbanks. The Company has already issued Equity Shares to all the lenders as per the CDRsanction. Further the Company is in the process of issuing Debentures (NCDs & FCDs) toall the lenders as per CDR sanction. The Company has been given time upto 31st May 2017for the said issue of Debentures. The Board of Directors considering the future plan foroperations and support of the promoters lenders business associates and workmen ishopeful of improved profitability leading to improvement in its financial position. Allexpenses and incomes to the extent considered payable and receivable respectively unlessstated otherwise have been accounted for on mercantile basis".
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements:
8. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the "Annexure-A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
9. As required by section 143(3) oftheAct we reportthat:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion proper books of account as required bylaw have been kept by theCompany so far as appears from our examination of these books;
(c) The Balance Sheet the Profit and Loss Statement and the 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 oftheAct read with Rule 7 of the Companies(Accounts) Rules 2014;
(e) On the basis of written representations received from the Directors and taken onrecord by the Board of Directors none of the Directors of the Company is disqualified ason 31st March 2017 from being appointed as a Director in terms of Section164(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 refer to ourseparate Report in "Annexure-B"; and
(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 wherever applicable-Refer Note Nos. 20 30 and 32 tothe financial statements.
ii) The Company is not required to make provisions as at 31st March 2017 asrequired under the applicable law or accounting standards for material foreseeable losseson long term contracts including derivative contracts.
iii) There has been no amount required to be transferred to the Investors Education andProtection Fund by the company during the year ended 31st March 2017.
iv) The Company has provided requisite disclosures in its financial statements as toits holdings as
well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016 and these are in accordance with thebooks of accounts maintained by the Company. Refer Note No. 36 to the financialstatements.
| ||For A.K. SOOD & ASSOCIATES ||For S.TANDON & ASSOCIATES |
| ||Chartered Accountants ||Chartered Accountants |
| ||Firm Registration No. 000072N ||Firm Registration No. 006388N |
| ||Sd/- ||Sd/- |
|Place: Chandigarh Date : May 242017 ||(GAURAV SOOD) ||(G.L. SEHGAL) |
|Partner ||Partner |
|#MDStart#Membership No. 507583 ||Membership No. 82201 |