TO THE MEMBERS OF M/s. PAN ELECTRONICS (INDIA) LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of M/s. PAN ELECTRONICS (INDIA)LIMITED ("the Company") which comprise the standalone balance sheet as at31st March 2020 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation.
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 Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and Loss and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
We did not find any significant matter during the course of the audit and the same hasbeen communicated to the management of the company. Accordingly it has been determinedthat nothing has been found to report under this heading.
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs (financial position) profit orloss (financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
b. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
d. Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
e. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 inparagraphs 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 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;
c. The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.
d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Companies Act 2013 read with the Rule 7 ofthe Companies (Accounts) Rules 2014;
e. On the basis of written representations received from the directors as on March 31st2020 taken on record by the Board of Directors none of the directors is disqualified ason March 31st 2020 from being appointed as a director in terms of section 164 (2) of theAct;
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";
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 does not have any pending litigation which would impact its financialposition;
(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses;
(iii)There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company;
3. As required by Section 197(16) of the Act we report that the Company has not paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act
For B N Subramanya & Co.
Firm Reg. No. 004142S
Membership No. 220210
Date: 30th June 2020
Annexure A to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31st March 2020 wereport that:
i) Fixed Assets
a) The Company has maintained proper records of fixed assets showing full particularsincluding quantitative details and situation of the assets.
b) The Management has conducted a physical verification of the fixed assets during theyear and no material discrepancies were noticed on such verification.
c) The title deeds of immovable properties are held in the name of the company.
The inventory has been physically verified during the year by the management atreasonable intervals and there are no material discrepancies noticed.
iii) Loans and Advances
The Company has not granted loans secured or unsecured to companies firms LLP's orother parties covered in the register maintained u/s 189 of the Act.
In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 have been complied with inrespect of loans investments guarantees and security given by the company.
According to the information and explanation given to us the company has not acceptedany deposits consequently directives of the RBI and the provision of Section 73 and 76 orany other relevant provision of the Companies Act2013 and the rules framed there underare not applicable to the company.
vi) Cost records
According to information and explanation given to us the company is not required tomaintain cost records as per sub section (1) of section 148 of the Act hence no commentis required on the same.
vii) Statutory Dues
a) The Company is irregular in depositing with the appropriate authorities undisputedstatutory dues relating to Income tax. The company has the following arrears of statutorydues as at the balance sheet date which were outstanding for more than 6 months from thedate they became payable
|Name of Statute ||Nature of the dues ||Amount in Rs. ||Period to which the amount relates ||Due date |
|Income Tax Act1961 ||Tax Deducted at Source(Sec-194C) ||Rs.6775 ||to April2019 September 2019 ||7th of Subsequent month |
|Income Tax Act1961 ||Tax Deducted at Source(Sec-194J) ||Rs.17050 ||to April2019 September 2019 ||7th of Subsequent month |
However the company is regular in depositing with appropriate authorities otherundisputed statutory dues including PF ESI Income Tax Goods and service tax customduty cess and other material statutory dues applicable to it.
b) According to the records of the Company there are no dues of Income tax or Salestax or Service tax or Goods and Services tax or duty of customs which have not beendeposited on account of any dispute.
viii) Repayment of Loans
According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the company has not defaulted in repayment ofloans or borrowings to a financial institution bank Government or dues to debentureholders.
ix) Diversion of Funds
According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there were no further public offer during theyear. The company has obtained term loan and has applied the funds for furtherance ofbusiness.
x) Frauds noticed / Detected
According to the information and explanations given to us and on the basis of ourexamination of the records of the Company no material fraud by the company or any fraudon the company by its officers or employees has been noticed or reported during the year.
xi) Managerial Remuneration
According to the information and explanations given to us and based on our examinationof the records of the company no managerial remuneration has been paid to any of the Keymanagerial persons. Hence no comment is required under this clause.
xii) Nidhi Company
The company is not a Nidhi Company as mentioned in section 406 of the Companies Act2013 and hence no comment is required on the same.
xiii) Related Party Transactions
According to the information and explanations given to us and on the basis of ourexamination of the records of the Company all transactions with the related parties arein compliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails of the transactions have been disclosed in the Financial Statements as required bythe accounting standards and The Companies Act 2013.
xiv) Preferential allotment
According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence no comment is required on the same.
xv) Non-cash transactions
According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the company has not entered into any non-cashtransactions with directors or persons connected with him and hence no comment is requiredon the same.
xvi) Certification for Non-Banking Financial Institution
The company is not a Non-Banking Financial Institution hence registration undersection 45-IA of the Reserve Bank of India Act 1934 is not required.
For B N Subramanya & Co.
Firm Reg. No. 004142S
Membership No. 220210
Date: 30th June 2020
Annexure B to Auditors' report
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 M/s. PANELECTRONICS (INDIA) LIMITED("the Company") as of March 31st 2020 inconjunction with our audit of the financial statements of the Company for the year endedon 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 FinancialReporting" issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation 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 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) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) Provide 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 authorisations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised 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 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.
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 March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the "Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting" issued by the Institute ofChartered Accountants of India.
For B N Subramanya & Co.
Firm Reg. No. 004142S
Membership No. 220210
Date: 30th June 2020