To the Members of PALCO METALS LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofPALCO METALS LIMITED (the Company) which comprise the Balance Sheet as atMarch 31 2021 and the Statement of Profit and loss the Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation. Management's Responsibility for the Ind AS financial statements TheCompany's Board of Directors is responsible for the matters stated in Section 134(5)of the Companies Act 2013 (the Act) with respect to the preparation of thesestandalone Ind AS 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 the Companies (Indian AccountingStandard) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the Ind AS financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error. Auditor'sResponsibility Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based on our audit. We have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the Ind AS financial statements are free from material misstatement. An auditinvolves performing procedures to obtain audit evidence about the amounts and thedisclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement ofthe Ind AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany's preparation of the Ind AS financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances butnot for the purpose of expressing an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the Ind ASfinancial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone Ind ASfinancial statements.
In our opinion and to the best of our information and according to theexplanations given to us the standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India:
a) in the case of the Balance Sheet of the state of affairs of theCompany as at March 31 2021; b) in the case of the Profit and Loss Account of the profitfor the year ended on that date. c) In case of Cash Flow Statement of the Cash Flow forthe year ended on that date.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined no matters to be the key auditmatters to be communicated in our report.
Due to outbreak of COVID-19 globally and in India the company'smanagement has made initial assessment of likely adverse impact on business and financialrisks and believes that the impact is likely to be short term in nature. The managementdoes not see any medium to long term risks in the company's ability to continue as a goingconcern and meeting its liabilities as and when they fall due.
Information Other than the Standalone Financial Statements andAuditor's Report Thereon
The Company's Board of Directors are responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report including Annexureto Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone financial statementsand our auditor's report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order2021 (the Order) issued by the Central Government of India in terms ofsub-section (11) of Section 143 of the Act we give in the Annexure A a statement on thematters specified in paragraph 3 and 4 of the Order to the extent applicable.
2. As required by section 143 (3) of the Act we report that:
a) we have obtained all the information and explanations which to thebest of 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 beenkept by the Company so far as appears from our examination of those books.
c) the Balance Sheet Statement of Profit and Loss and Cash FlowStatement dealt with by this Report are in agreement with the books of account.
d) in our opinion the aforesaid standalone Ind AS financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2015 as amended;
e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in Annexure B. With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us:
i) The Company has disclosed the impact of pending litigations on itsfinancial position in its Ind AS financial statements.
ii) The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.
iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
Annexure to the Auditors' Report
Referred to in the Paragraph 3 under the heading Report on theOther Legal and Regulatory Requirements' of our report of even date on the financialstatements of the Company for the year ended March 31 2021.
I. In respect of its fixed assets:
a. The Company does not have any Fixed assets as company . Thusparagraph 3(ii) of the order is not applicable to the company.
II. In respect of its Inventories: a
. The Company does not hold any physical inventories as company is notengaged in any manufacturing activity. Thus paragraph 3(ii) of the order is notapplicable to the company.
III. In respect of loans granted and taken to / from parties covered inthe register maintained u/s 189 of the Companies Act 2013 The company has not granted anyloans secured or unsecured to companies firms Limited Liability Partnerships or otherparties covered in the register maintained under section 189 of the Companies Act 2013.
(i) the terms and conditions of the grant of such loans are notprejudicial to the company's interest.
(ii) the schedule of repayment of principal and payment of interest hasbeen stipulated and whether the repayments or receipts are regular.
(i) according to the information and explanations given to us overdueamount is more than rupees five lakhs reasonable steps have been taken by the company forrecovery of the principal and interest.
IV. In respect of loans investments and guarantees u/s. Section 185and 186 of the Companies Act 2013.
In our opinion and according to the information and explanations givento us the company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 with respect to the Loans given investment made guarantees andsecurities given.
V. In respect of deposits from public :
In our opinion and according to the information and explanations givento us the Company has not accepted any deposits from the public during the year.Therefore the provisions of clause 4(vi) of CARO are not applicable to the Company.
VI. In respect of maintenance of cost records: Pursuant to rules madeby the Central Government for the maintenance of cost records under sub-section (1) ofsection 148 of the Companies Act 2013 in respect of certain manufacturing activities asinformed to us the Company is not required to maintain cost records.
VII. In respect of statutory dues:
(a) According to the information and explanations given to us and onthe basis of our examination of the records of the Company amounts deducted / accrued inthe books of account in respect of undisputed statutory dues including Provident fundIncome tax Wealth tax Sales tax Service tax Value added tax cess and any othermaterial statutory dues have generally been regularly deposited during the year by theCompany with the appropriate authorities. As explained to us the Company did not have anydues on account of Employees' State Insurance Custom Duty and Excise duty. Accordingto the information and explanations given to us there are no undisputed statutory duespayable in respect of Provident Fund Employees State Insurance Income tax Sales-taxWealth Tax Custom Duty Excise Duty Cess which are outstanding as at 31.3.2021 for aperiod of more than six months from the date they became payable. According to theinformation and explanations given to us there are no dues of Wealth tax Customs dutyand Cess which have not been deposited with the appropriate authorities on account of anydispute.
VIII. In respect of dues to financial institution / banks / debentures:Based on our audit procedures and on the basis of information and explanation given by themanagement we are of the opinion that the company has not defaulted in the repayment ofdues to financial institution and banks.
IX. In respect of application of money raised by Initial public offer further public offer (including debt instruments) and term loans. According to theinformation and explanations given to us company has not raised any money from initialpublic offer further public offer (including debt instruments). According to theinformation and explanations given to us and based on the documents and records examinedby us on an overall basis the term loan has been applied for the purpose for which theloans were obtained.
X. In respect of fraud:
To the best of our knowledge and belief and according to theinformation and explanations given to us no fraud by the Company or on the Company by itsofficers or employees 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 givento us and on the basis of our examination of the records managerial remuneration has beenpaid or provided in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Companies Act.
XII. In respect of Nidhi Company In our opinion and according to theinformation and explanations given to us Company is not Nidhi Company . Hence Compliancerelated to Net owned fund is not applicable to company.
XIII. In Respect of Related parties Transactions In our opinion andaccording to the information and explanations given to us all transactions with therelated parties are in compliance with Section 188 and 177 of Companies Act 2013 whereapplicable and the details have been disclosed in the Financial Statements etc as requiredby 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 companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and if so compliance under section 42of the Companies Act 2013 need not complied with.
XV. In Respect of Non Cash transactions with Directors According to theinformation and explanations given to us the company has not entered into any non-cashtransactions with directors or persons connected with him and so compliance under section42 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 theReserve Bank of India Act 1934
Annexure-B to the Auditors' Report referred:
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act) We haveaudited the internal financial controls over financial reporting of Palco Metals Limited(the Company) as of 31st March 2021 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'smanagement is responsible for establishing and maintaining internal financial controlsbased 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(ICAI').These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We 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 Institute of Chartered Accountantsof India. 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting. Meaning of Internal Financial Controlsover Financial Reporting A company's internal financial control over financial reportingis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements. Inherent Limitations ofInternal Financial Controls over Financial Reporting Because of the inherent limitationsof internal financial controls over financial reporting including the possibility ofcollusion or improper management override of controls material misstatements due toerror or fraud may occur and not to be detected. Also projections of any evaluation ofthe internal financial controls over financial reporting to future periods are subject tothe risk that the internal financial control over financial reporting may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate. Opinion In our opinion the Company has in allmaterial respects an adequate internal financial controls system over financial reportingand such internal financial controls over financial reporting were operating effectivelyas at 31st March 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.
| ||For K P S J & ASSOCIATES LLP |
| ||Chartered Accountants |
| ||FRN:124845W/W100209 |
| ||SHRIRAM RAMRATAN LADDHA |
| ||PARTNER |
|Place: AHMEDABAD ||Membership No.: 112900 |
|Date: 05/09/2021 || |