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Punjab Communications Ltd.

BSE: 500346 Sector: Telecom
NSE: PUNJCOMMU ISIN Code: INE609A01010
BSE LIVE 11:43 | 15 Dec 40.60 1.60
(4.10%)
OPEN

37.75

HIGH

40.60

LOW

37.70

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 37.75
PREVIOUS CLOSE 39.00
VOLUME 300
52-Week high 61.30
52-Week low 34.30
P/E
Mkt Cap.(Rs cr) 49
Buy Price 38.00
Buy Qty 100.00
Sell Price 40.60
Sell Qty 20.00
OPEN 37.75
CLOSE 39.00
VOLUME 300
52-Week high 61.30
52-Week low 34.30
P/E
Mkt Cap.(Rs cr) 49
Buy Price 38.00
Buy Qty 100.00
Sell Price 40.60
Sell Qty 20.00

Punjab Communications Ltd. (PUNJCOMMU) - Auditors Report

Company auditors report

To

The Members

Punjab Communications Limited

Report on the Financial Statements

We have audited the accompanying standalone financial statements of PunjabCommunications Limited ("the

st

Company") which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended summary ofthe significant 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 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 provisions of the Act for safeguarding of 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 relevantto the preparation and presentation of the financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

Auditors' 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 have conducted our audit in accordance with the Standards on Auditing specifiedunder Section 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 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 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 audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:

i. In the case of the Balance Sheet of the state of affairs of the Company as at 31March 2017; ii. In the case of the Statement of Profit and Loss of the Loss for the yearended on that date; and iii. In the Cash Flows Statement of the cash flows for the yearended of that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

(a) Attention is invited to Notes 8 12 & 15 in financial statements regardingrealization of investment of Rs. 698.74 Lacs (Face Value Rs. 700 lacs) in the Bonds of UPCo-operative Spinning Mills Federation Ltd (UPCSMFL) duly guaranteed by the U.P StateGovernment wherein it has been stated that the company has not made any provision forpermanent diminution in the value of investment as they are fully guaranteed by the UPState Government. The

company had filed the execution of earlier decree issued in favour of Puncom againstthe UPCSMFL on 30 January 2016 and also filed a fresh suit against the State of UPthrough Special Secretary Industrial Development on 11 March 2016.

In compliance to the Orders of Hon'ble High Court of Punjab & Haryana Chandigarhthe U. P. State Government (Guarantor) deposited Rs. 735.63 Lacs and additional BankGuarantee of the same amount with the District Court Lucknow. The amount of Rs. 735.63Lacs was withdrawn by the Company against furnishing of Bank Guarantee of the same amount.

However the Hon'ble Supreme Court of India vide its Order dated 19 January 2015directed the Civil Court Lucknow to refund the amount of Rs.735.63 Lacs to the U. P.State Government on the ground as informed by the management that the Company in filingthe petition before the Hon'ble High Court of Punjab & Haryana had not made the U. P.State the party to this petition under which the Bonds were invested. However the saidOrder is pending for execution. Taking cognizance of the same the Company accounted forthe same as liability of Rs.735.63 Lacs in the FY 2015-16 due to District Court Lucknowand it has been reflected under Note 8 to the financial statements.

(b) Attention is invited to Note 7 and 17 in the matter of balance confirmationswherein we further specify that the said balance confirmations have not been received byus till the date of signing of the financial statements.

c Attention is invited to Significant Accounting Policy 1-I (b) certain items ofincome and expenditure have been accounted for as and when they are incurred ascertainedor settled. Impact of such treatment on profits of the year has not yet been ascertained.

(d) As per the explanation and information provided to us the Company has beenselected for Disinvestment by the Cabinet Committee on Disinvestment Government of Punjabbut no final decision is respect of disinvestment mode has been taken during the yearunder review.

Our opinion is not modified in respect of the matters mentioned above at (a) (b) (c)and (d).

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 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 in theparagraph 3 and 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 purpose 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.

(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 and with the returnsreceived from the branches not visited by us.

(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 and as amended from time to time.

(e) On the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 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 system overfinancial reporting of the company and the operating effectiveness of such controls referto our separate Report in 'Annexure - B'.

(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 as amended byCompanies (Audit and Auditors) Amendment Rules 2017 dated 30 March 2017 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 Notes 31 and 35 to the financial statements;ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses except as mentioned above under Matter ofEmphasis and Note 36 of the financial statements.

iii. During the year there were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the financial statements as toits holding as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016. Based on audit procedures and relying on the ManagementRepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced before us by the Management.

For GREWAL & SINGH
CHARTERED ACCOUNTANTS
FRN: 012322N
CA HARCHARAN SINGH GREWAL
Place : Chandigarh PARTNER
Date : May 19 2017 M. No: 083692

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT OF

PUNJAB COMMUNICATIONS LIMITED FOR F.Y. 2016 - 17

1. (a) As per the information and explanations provided to us the company ismaintaining proper records showing full particulars including quantitative details andsituation of fixed assets;

(b) The company has a regular system of verification of fixed assets at the end of eachyear which in our opinion is reasonable having regard to the size of the company and thenature of its assets. Fixed assets were verified by the company and no discrepancy wasnoticed.

(c) As per the information and explanations provided to us the title deeds ofimmovable properties of the company are held in the name of company.

2. The company has a regular system of verification of the inventory at the end of eachyear which in our opinion is reasonable having regard to the size of the company. Theinventory was verified and the discrepancies noticed on physical verification betweenphysical records and book records were not material and have been adequately dealt in thebooks of account.

3. As per the information and explanations given to us the company has not granted anyloans secured or unsecured to companies firms LLPs or other parties listed in theregister maintained under section 189 of the Companies Act 2013.

4. In our opinion and according to the information and explanations given to us inrespect of loans investments guarantees and securities the company has complied withthe provisions of Section 185 and 186 of the Companies Act 2013.

5. According to the information and explanations given to us we are of opinion thatthe company has not accepted any deposit in pursuance of sections 73 to 76 or any otherrelevant provisions of the Companies Act and the rules framed there under.

6. We have broadly reviewed the books and account maintained by the company pursuant tothe Rules made by the Central Government for the maintenance of cost records undersub-section (1) of section 148 of the Companies Act 2013 and is of the opinion that primafacie the prescribed accounts and records have been maintained. However during thecurrent year the Company was not required to maintain cost records as per the provisionsof Section 148(1).

7. (a) According to the information and explanations given to us and books and recordsas produced and examined by us are in accordance with generally accepted auditingpractices in India and also based on management representation the company is regular indepositing undisputed statutory dues including provident fund employees state insuranceincome-tax sales tax service tax duty of customs duty of excise value added tax cessand any other statutory dues with the appropriate authorities. Further we report that noundisputed amount payable in respect to such statutory dues were outstanding as at 31stMarch 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofprovident fund employees state insurance income-tax sales tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues which havenot been deposited on account of any dispute. However the following demands have beenraised in respect of disputed dues pending before various statutory authorities:

S. No. Particulars Tentative amount involved Matter/Cases pending since Forum where Dispute is pending Current Status/Reason for Pendency
1. Excise and custom duty demand Rs.30.20 Lacs FY 2002-03 Deputy Commissioner of Customs New Delhi Reply was submitted in 2002-03.
Thereafter no further communications has been received.
2. Sales Tax demand Rs.14.85 Lacs FY 2011-12 Sales Tax Appellate Tribunal Andhra Pradesh Appeal against the said Sales tax demand for FY 2004-05 was admitted. Matter not listed for hearing yet.
3. Sales Tax demand Rs.16.77 Lacs FY 2014-15 Ld. Senior Joint Commissioner Salt Lake Taxa- tion Appellate Office West Bengal Appeal filed by the Company against the said Sales Tax Demand for FY 2011-12 admitted by the Department.
4. Sales Tax demand Rs.14.67 Lacs FY 2015-16 Ld. Senior Joint Commissioner Salt Lake Taxa- tion Appellate Office West Bengal Appeal filed by the Company against the said Sales Tax Demand for FY 2012-13 admitted by the Department.

8. In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of dues to the financial institutions or banks. Wefurther report that the company has no debenture holders during the year.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year under audit.

10. According to the information and explanations given to us no fraud by or on thecompany by its officers/employees has been noticed or reported during the course of ouraudit.

11. That Section 197 read with Schedule V to the Companies Act in relation to themanagerial remuneration is not

th

applicable to Government Companies as per Notification No GSR 463E dated 05 June 2015.

12. The company is a manufacturing company and not a chit fund or a Nidhi Company.Therefore this clause is not applicable to the Company.

13. The company transactions with the related parties are in compliance with section188 and 177 of CompaniesAct 2013 and the details have been disclosed in the financialstatement as required by the Accounting Standard and Companies Act 2013.

14. The company has not made any preferential allotment/private placement of shares orfully or partly convertible debentures during the year.

15. As per information and explanation given to us no such non cash transactions wereentered into by the Company with Directors or persons connected with it.

16. According to the information and explanations given to us the company is notrequired to be registered under section 45-I A of the Reserve Bank of India Act 1934.

For GREWAL & SINGH
CHARTERED ACCOUNTANTS
FRN: 012322N
CA HARCHARAN SINGH GREWAL
Place : Chandigarh PARTNER
Date : May 19 2017 M. No: 083692

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT OF

PUNJAB COMMUNICATIONS LIMITED FOR F.Y. 2016 - 17

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 PunjabCommunications Limited ("the Company") as of 31 March 2017 inconjunction with our audit of financial statements of the Company for the year ended onthat date.

Management's Responsibility over 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').

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required by 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 have conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 judgment 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. pertains to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provides reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. provides reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 may 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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal financial controls stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For GREWAL & SINGH
CHARTERED ACCOUNTANTS
FRN: 012322N
CA HARCHARAN SINGH GREWAL
Place : Chandigarh PARTNER
Date : May 19 2017 M. No: 083692