Procal Electronics India Ltd.
|BSE: 526009||Sector: Engineering|
|NSE: N.A.||ISIN Code: INE700B01015|
|BSE 00:00 | 24 Feb||Procal Electronics India Ltd|
|NSE 05:30 | 01 Jan||Procal Electronics India Ltd|
|BSE: 526009||Sector: Engineering|
|NSE: N.A.||ISIN Code: INE700B01015|
|BSE 00:00 | 24 Feb||Procal Electronics India Ltd|
|NSE 05:30 | 01 Jan||Procal Electronics India Ltd|
TO THE MEMBERS OF PROCAL ELECTRONICS INDIA LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of M/s. PROCAL ELECTRONICSINDIA LIMITED( "the Company"] which comprise the Balance Sheet as at March31 2019 the Statement of Profit and Loss (including Other Comprehensive Income] theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and notes to the financial statementsincluding a summary of the significantaccounting policies and other explanatory information (hereinafter referred to as"the financial statements"].
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 theCompanies Act 2013 ("the Act"] in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards] Rules 2015 as amended("Ind AS"] and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its loss (financial performanceincluding other comprehensive income] changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10] of the Act (SAs]. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI] together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of
the financial statements as a whole and in forming our opinion thereon and we do notprovide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to becommunicated in our report.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the 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 during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibilitiesfor the Ind AS 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 financial statements that givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind AS andother accounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
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.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
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 weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3](i] of the Act 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.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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.
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.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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.
1. Material Uncertainty Related to Going Concern :The Company's net worth is erodedcompletely due losses incurred by the company and there are no business activities in thecompany. Further borrowings from banks have been classified by the bank as nonperformingassets.
We have been informed by the management that the company is in process of settlementthe dues with bank and/or identifying the other alternative plans.
The above factors cast significant uncertainty on the Company's ability to continue asa going concern. Pending the resolution of the above uncertainties the company hasprepared these financial statement on a going concern basis.
2. Inventory of Raw Material & Finished goods inventory consists of Raw Material& Finished goods is lying at Silvassa Manufacturing unit of the company. The saidunit is in the possession of Canara Bank (the lender) and hence the management express itsinability to physically verify and ascertain the fair value of the inventory. In View ofthe above the inventory carried at cost in the financial statements
3. Bank Account:During the year the bank account of the company were inoperativepending KYC Compliances. All the payments on behalf of the company has been made fromdirector bank accounts.
Our opinion is not qualified in respect of these matters.
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 in terms of Section 143(11) of the Actand on the basisof such checks of the books and records of the Company as weconsidered appropriate andaccording to the information and explanations given to uswe give in "AnnexureA" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act based on our audit 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 purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so faras it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flowsdealt with by thisReport are inagreement with the relevant books of account.
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with the Companies (Indian Accounting Standards)Rules2015 as amended.
e) On the basis of the written representations received from the directors as on March31 2019taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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 inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. Therewere no amounts due which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Annexure - A to the Independent Auditor's Report
Referred to in paragraphl under 'Report on Other Legal and Regulatory Requirements'section of our report to the members of M/s. PROCAL ELECTRONICS INDIA LIMITEDof even dateon the financial statementsfor the year ended March 31 2019we report that:
i. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of itsFixed Assets.
b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us the discrepancies noticed have been properly dealt with in thebooks of accounts.
c) According to the information and explanations given to us and on the basis of ourexamination of the records provided to us we report that the title deeds comprising allthe immovable properties which are freehold are held in the name of the Company as at thebalance sheet date. In respect of leasehold land that have been taken on lease anddisclosed as fixed assets in the financial statements the lease agreements are in thename of the Company.
ii. a) According to the explanations given to us the inventories have not beenphysically verified by the management of the company as the same are in control withfinancial institutions.
b) In the absence of that we are not in a position to comment on frequency andprocedure of physical verification.
c) Since the Inventory under the control of the Financial Institution the companydoes not having proper records of inventory and current status.
iii. In our opinion and according to the information and explanations given toustheCompany has not granted any loan secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly reporting under clause 3(iii) (a) (b) and (c) of the Orderare not applicable.
iv. The Company has not granted any loans or made any investments or provided anyguarantee or security to parties covered under section 185 and 186 of the Act. Thereforethe provision of Clause 3(iv) of the said Order is not applicable to the Company.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any depositsduring the year and does not have any unclaimeddeposits as at March 31 2019 and therefore the provisions of the clause 3(v) of theOrder are not applicable to the Company.
vi. The Central Government has not prescribed maintenance of cost records undersub-section (1) of section 148 of the Act in respect of any activities of the Company.Therefore the provision of Clause 3(vi) of the said Orderis not applicable to theCompany.
vii. a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is generally regular in depositing undisputedapplicable statutory dues including provident fund employees' state insurance incometax sales tax duty of custom goods and services tax cess and any other statutory duesto the appropriate authorities and there are no undisputed dues outstanding as on March31 2019 for a period of more than six months from the date they become payable except thefollowing : .
b) In our opinion and according to the information and explanations given to us thereare no statutory dues as at the year-end which has not beendeposited on account of adispute except the dues as discussed below:
viii. In our opinion and according to the information and explanations given to us theCompany has defaulted in repayment of loans or borrowings to bank. The details of whichare as under :
The Company has not issued any debentures as at Balance Sheet Date.
ix. According to the information and explanations given to us the Company has appliedthe term loans for the purpose for which those were obtained. During the year the Companyhas not raised any monies through initial public offer or further public offer (includingdebt instruments).
x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandate by the provisions of section 197 read with schedule V to the Act.
xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.
xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. The Company has made preferential allotment of shares during the year. Theprovisions of Section 42 of the Act have been complied with in this regard and amount hasbeen utilized for the purpose for which it was raised. The Company has not made anyprivate placement of shares or fully or partly paid convertible debentures during theyear.
xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure - B to the Independent Auditor's Report
Referred to in paragraph 2(f) under 'Report on Other Legal and Regulatory Requirements'section of our report to the members of M/s. PROCAL ELECTRONICS INDIA LIMITEDof even dateon the financial statements for the year ended March 31 2019
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of M/s. PROCALELECTRONICS INDIA LIMITED( "the Company")as of March 31 2019 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls 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. 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 respective 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 Act.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 judgement 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 internal financial controls system overfinancial reporting of the Company.
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 overfinancialreporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.However the company does not have an Internal Auditor as required under theCompanies Act 2013.