The Members of
PALCO METALS LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of PALCO METALSLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2017and the Statement of Profit and loss 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
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 provisions of the Act for safeguarding 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.
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 Audit ng 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 eviden ce 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 preparaton 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 report ng and the operatng effectveness of such controls. An audit alsoincludes evaluatng the appropriateness of the accountng policies used and thereasonableness of the accountng estmates made by the Company's Directors as well asevaluatng the overall presentaton of 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.
In our opinion and to the best of our informaton and according to the explanatons givento us the standalone financial statements give the informaton required by the Act in themanner so required and give a true and fair view in conformity with the accountngprinciples generally accepted in India
a) in the case of the Balance Sheet of the state of affairs of the Company as at March31 2017;
b) in the case of the Profit and Loss Account of the profit/ loss for the year endedon that date.
c) In case of Cash Flow Statement of the Cash Flow for the year ended on that date.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government of India in terms of sub-secton (11) of Sect on 143 ofthe Act we give in the Annexure a statement on the matters specified in paragraph 3 and 4of the Order to the extent applicable.
2. As required by sect on 143 (3) of the Act we report that:
a) we have sought and obtained all the informaton and explanatons which to the best ofour 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 appears from our examinaton of those books.
c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (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 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 - Refer Note to the financial statement
ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv) The Company has provided requisite disclosures in the standalone financialstatements as to holding as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to December 2016 on the basis of information available with theCompany. Based on audit procedures and relying on management's representation we reportthat disclosures are in accordance with the books of accounts maintained by the Companyand as produced to us by the Management. - Refer Note - 25
| ||For RAHUL KAKANI & ASSOCIATES |
| ||(CHARTERED ACCOUNTANTS) |
| ||[RAHUL KAKANI] |
| ||PARTNER |
|Place: -Ahmedabad ||M.NO.: - 132796 |
|Date: - 29/05/2017 ||F.R.No. 130198W |
Annexure to the Auditors' Report
Referred to in the Paragraph 3 under the heading 'Report on the Other Legal andRegulatory Requirements' of our report of even date on the financial statements of theCompany for the year ended March 31 2017.
I. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. According to the information and explanations given to us the fixed assets havebeen physically verified by the management during the year in a phased periodical mannerwhich in our opinion is reasonable having regard to the size of the Company and natureof its business. No discrepancies of serious nature have been noticed by the managementand almost all the items as appearing in the register have been physically verified at theend of the year.
c. According to the information and explanations given to us title deeds of immovableproperties are held in the name of the company.
II. In respect of its Inventories:
a. The Company does not hold any physical inventories as company is not engaged in anymanufacturing activity. Thus paragraph 3(ii) of the order is not applicable to thecompany.
III. In respect of loans granted and taken to/from parties covered in the registermaintained u/s 189 of the Companies Act 2013
The company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.
(i) the terms and conditions of the grant of such loans are not prejudicial to thecompany's interest.
(ii) the schedule of repayment of principal and payment of interest has been stipulatedand whether the repayments or receipts are regular.
(i) according to the information and explanations given to us overdue amount is morethan rupees five lakhs reasonable steps have been taken by the company for recovery ofthe principal and interest.
IV. In respect of loans investments and guarantees u/s. Section 185 and 186 of theCompanies Act 2013.
In our opinion and according to the information and explanations given to us Inrespect of loans investments and guarantees whether provisions of Section 185 and 186 ofthe Companies Act 2013 have been complied with.
V. In respect of deposits from public :
In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public during the year. Therefore theprovisions of clause 4(vi) of CARO are not applicable to the Company.
VI. In respect of maintenance of cost records:
Pursuant to rules made by the Central Government for the maintenance of cost recordsunder sub-section (1) of section 148 of the Companies Act 2013 in respect of certainmanufacturing activities as informed to us the Company is not required to maintain costrecords.
VII. In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Income taxWealth tax Sales tax Service tax Value added tax cess and any other material statutorydues have generally been regularly deposited during the year by the Company with theappropriate authorities. As explained to us the Company did not have any dues on accountof Employees' State Insurance Custom Duty and Excise duty. According to the informationand explanations given to us there are no undisputed statutory dues payable in respect ofProvident Fund Employees State Insurance Income tax Sales-tax Wealth Tax Custom DutyExcise Duty Cess which are outstanding as at 31.3.2017 for a period of more than sixmonths from the date they became payable.
According to the information and explanations given to us there are no dues of Wealthtax Customs duty and Cess which have not been deposited with the appropriate authoritieson account of any dispute.
VIII. In respect of dues to financial institution/banks/debentures:
Based on our audit procedures and on the basis of information and explanation given bythe management we are of the opinion that the company has not defaulted in the repaymentof dues to financial institution and banks.
IX. In respect of application of money raised by Initial public offer further publicoffer (including AX debt instruments) and term loans
According to the information and explanations given to us company has not raised anymoney from initial public offer further public offer (including debt instruments).
According to the information and explanations given to us and based on the documentsand records examined by us on an overall basis the term loan has been applied for thepurpose for which the loans were obtained.
X. In respect of fraud:
To the best of our knowledge and belief and according to the information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit.
XI. In respect of Managerial Remuneration.
In our opinion and according to the information and explanations given to us and on thebasis of our examination of the records managerial remuneration has been paid or providedin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.
XII. In respect of Nidhi Company
In our opinion and according to the information and explanations given to us Companyis not Nidhi Company . Hence Compliance related to Net owned fund is not applicable tocompany.
XIII. In Respect of Related parties Transactions
In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with Section 188 and 177 ofCompanies Act 2013 where applicable and the details have been disclosed in the FinancialStatements etc as required by the accounting standards and Companies Act 2013.
XIV. In Respect of Preferential Allotment/Private Placement of shares.
According to the information and explanations given to us the company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review and if so compliance under section 42 of theCompanies Act 2013 need not complied with.
XV. In Respect of Non Cash transactions with Directors
According to the information and explanations given to us the company has not enteredinto any noncash transactions with directors or persons connected with him and socompliance under section 42 of the Companies Act 2013 need not complied with.
XVI. In Respect of Registration of Nidhi Company .
The company is not required to be registered under section 45-IA of the Reseive Bank ofIndia Act 1934.
For RAHUL KAKANI & ASSOCIATES
M.NO.: - 132796
Date: - 29/05/2017
Annexure-B to the Auditors' Report referred:
Report on the Internal Financial Controls under Clause (i) of Sub - section 3 ofSection 143 of the Companies Act 2013 ("the Act" )
We have audited the internal financial controls over financial reporting of PalcoMetals Limited ("the Company") as of 31March2017 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that 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').
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 under the Companies Act 2013.
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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 interna 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) 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 authorizations ofmanagement and directors of the company; and (3) error or fraud may occur and not bedetected.
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 all 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 Institute ofChartered Accountants of India.
For RAHUL KAKANI & ASSOCIATES
M.NO.: - 132796
Place: - Ahmedabad
Date: - 29/05/2017.