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Auditor Report of Punjab Communications Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Punjab Communications Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the 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 Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view 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 statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide 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 explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit/loss and its cash flows for the year ended on that date.

Emphasis of Matters

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

(a) Attention is invited to Note 13 in financial statements regarding realization of investment of Rs. 700 lacs in the Bonds of UP Co-operative Spinning Mills Federation Ltd and interest of Rs. 968.43 lacs accruing up to 12.07.2005 consequent to the ex-parte decree awarded by Court against the UP State Government, which is pending for execution before the lower court. In view of the uncertainty involved in the realization of interest, the interest accrued amounting to Rs. 968.43 lacs up to 12.07.2005 i.e. date of deposit of the decreed amount by the

UP Government, and for the period subsequent thereto, has not been recognized as income.

On 19.01.2015, the Hon'ble Supreme Court had decided against the ex-parte decree earlier made in favour of the company. Accordingly, in view of the protracted litigation and uncertainty of the amount realizable, pending settlement of the case, the accrued interest standing at the beginning of the year amounting to Rs. 115.63 lacs has been provisioned by the Company to comply with the applicable Accounting Standards.

(b) Attention is invited to Significant Accounting Policy I(b), certain items of income and expenditure have been accounted for on cash basis. Impact of such treatment on profits of the year has not been ascertained.

c) Attention is invited to Note No 26 of the financial statements. Hon'ble Supreme Court has passed an order dated 24.03.2015 in case of Sh. A.S Gill Vs Punjab Communications Limited in which it has directed to pay 30% back wages for the period 11.3.2003 to 30.04.2006. The company has adequately provided for the provisional amount of Rs. 52.35 lacs in its books of accounts as on 31.03.2015.

d) As per the explanation and information provided to us, the Company has been selected for Disinvestment by Cabinet Committee on Disinvestment, Government of Punjab but no final Decision is respect of disinvestment mode has been taken place during the year under review. Also refer Para 1 of our report on Directions issued u/s 143(5) of the Companies Act, 2013.

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

Report on Other Legal and Regulatory Requirements

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 best of 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 the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".

(g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its financial statements - Refer Note 26, 28 and 34 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.(Also Refer Note 35)

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

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements."

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, fixed assets have been physically verified by the management at the end of the year. We have also obtained physical verification report and no material discrepancies were noticed in the verification report.

2. a) As explained to us, the inventories were physically verified by the management at the end of the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to information and explanations given to us, the Company has maintained proper records of its inventories. We have also obtained physical verification report and the discrepancies noticed on physical verification between physical stock and book records were not material and have been adequately dealt in the books of account.

3. As explained to us, the Company has neither granted any secured/unsecured loans to, nor taken secured/unsecured loans from, any Company, firm or other parties covered in the register maintained under section 189 of the Companies Act, 2013

4. The Company has adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of stores, raw material including components, plant and machinery, equipment and other assets and for sale of goods and services. We have not come across any major weakness in internal control system.

5. The Company has not accepted any deposits from public during the year.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013. However, during the current year, the company was not required to maintain cost records as per provision of Section 148(1).

7. a) According to the records of the Company, it is regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues with appropriate authorities. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues, which have remained outstanding as at 31st March 2015 for a period of more than six months from the date when they became payable.

b) According to the information and explanations given to us, there were no disputed amounts in respect of income tax, sales tax, custom duty, excise duty, etc which were outstanding in the books of accounts as at 31st March 2015. However, the following demands have been raised in respect of disputed dues pending before various statutory authorities:

(i) The excise and custom duty demand of Rs. 30.20 lacs is disputed with Deputy Commissioner of Customs, New Delhi.

(ii) The Sales Tax demand including interest aggregating to Rs. 14.85 lacs (net of pre-deposit) is disputed and the appeal is pending at the office of Sales Tax Appellate Tribunal, Andhra Pradesh.

(iii) The Sales Tax demand including interest aggregating to Rs. 16.77 lacs is disputed and the appeal is pending at the office of Ld. Senior Joint commissioner, Salt Lake Taxation appellate office (South 24 Parganas), Kolkata, West Bengal.

c) As informed to us, no such amount was required to be transferred to investor education and protection fund during the year.

8. The Company does not have any accumulated losses. The Company has incurred cash loss amounting to Rs. 769.71 Lacs in the current financial year and Rs. 592.04 Lacs in the immediately preceding financial year.

9. The Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

10. According to information and explanations given to us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

11. The Company has not obtained any term loans during the year.

12. Based upon the audit procedures performed and information and explanations given to us by the management, no fraud on or by the Company has been noticed or reported during the year.

For B. Rattan & Associates Chartered Accountants FRN : 011798N

Bharat Rattan

Place : Chandigarh (Partner)

Dated : May 28, 2015 M. No : 090682


Mar 31, 2014

We have audited the accompanying financial statements of Punjab Communications Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in lndia :

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

b) in the case of the Statement of Profit and Loss Account, of the loss for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Matter of Emphasis

(a) Attention is invited to Note 9 in financial statements regarding realization of investment of Rs. 700 lacs in the Bonds of UP Co-operative Spinning Mills Federation Ltd and interest of Rs. 968.43 lacs accruing up to 12.07.2005 consequent to the ex-parte decree awarded by Court against the UP State Government, which is pending for execution before the lower court. In view of the uncertainty involved in the realization of interest, the interest accrued amounting to Rs. 968.43 lacs up to 12.07.2005 i.e. date of deposit of the decreed amount by the UP Government, and for the period subsequent thereto, has not been recognized as income.

(b) Attention is invited to Significant Accounting Policy 1(b), certain items of income and expenditure have been accounted for on cash basis. Impact of such treatment on profits of the year has not been ascertained.

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best 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 been kept by the Company so far as appears from our examination of books of accounts;

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the Books of account;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

e) In terms of Government of India, Department of Corporate Affairs Notification No. GSR 829(E) dated 21st October, 2003, Government companies are exempt from the applicability of provisions of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements."

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, fixed assets have been physically verified by the management at the end of the year. Considering the size of the Company and nature of its fixed assets, no material discrepancies were noticed on such verification.

c) As explained to us, No fixed assets have been disposed off during the year under review.

2. a) As explained to us, the inventories were physically verified by the management at the end of the year. We

have also obtained physical verification report and no major discrepancies noted.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.

3. The Company has neither granted any secured/unsecured loans to, nor taken secured/unsecured loans from, any Company, firm or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

4. The Company has adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of stores, raw material including components, plant and machinery, equipment and other assets and for sale of goods. We have not come across any major weakness in internal control.

5. There are no transactions, which need to be entered in register maintained under section 301 of the Act.

6. The Company has not accepted any deposits from public during the year.

7. In our opinion, the internal audit system prevalent in the Company is commensurate with the size of the Company and the nature of its business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9. a) According to the records of the Company, it is regular in depositing undisputed statutory dues including

provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues with appropriate authorities. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues, which have remained outstanding as at 31st March 2014 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 were no disputed amounts in respect of income tax, sales tax, custom duty, excise duty, etc which were outstanding in the books of accounts as at 31st March 2014. However, the following demands have been raised in respect of disputed dues pending before various statutory authorities :

(i) The excise and custom duty demand of Rs. 30.20 lacs is disputed with excise and custom department.

(ii) The Sales Tax demand including interest aggregating to Rs. 14.85 lacs (net of pre-deposit) is disputed and the appeal is pending at the office of Sales Tax Appellate Tribunal, Andhra Pradesh.

10. The Company does not have any accumulated losses. The Company has incurred cash loss amounting to Rs. 592.04 Lacs in the current financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to Chit fund, Nidhi or mutual benefit fund, society are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures or other investments. Hence, requirements of paragraph 4(xiv) are not applicable to the Company.

15. According to information and explanations given to us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

16. The Company has not obtained any term loans during the year.

17. According to the cash flow statement and other records examined by us and on the basis of information and explanations given to us, funds raised on short-term basis have not been used for long-term investment.

18. The company has not made preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money through public issue of shares during the year.

21. Based upon the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For B. Rattan & Associates Chartered Accountants FRN : 011798N

Bharat Rattan Place : Chandigarh Partner Date : May 30, 2014 Membership No : 090682


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Punjab Communications Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

ln our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in lndia :

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Matter of Emphasis

(a) Attention is invited to Note 7 in financial statements regarding realization of investment of Rs. 700 lacs in the Bonds of UP Co-operative Spinning Mills Federation Ltd. and interest of Rs. 968.43 lacs accruing up to 12.07.2005 consequent to the ex-parte decree awarded by Court against the UP State Government, which is pending for execution before the lower court. In view of the uncertainty involved in the realization of interest, the interest accrued amounting to Rs. 968.43 lacs up to 12.07.2005 i.e. date of deposit of the decreed amount by the UP Government, and for the period subsequent thereto, has not been recognized as income.

(b) As detailed at significant Accounting Policy 1(b), certain items of income and expenditure have been accounted for on cash basis. Impact of such treatment on profits of the year has not been ascertained.

Our opinion is not qualified in respect of the matters mentioned at (a) and (b) above''

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best 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 been kept by the Company so far as appears from our examination of those books

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3c) of section 211 of the Companies Act, 1956;

e) In terms of Government of India, Department of Corporate Affairs Notification No. GSR 829(E) dated 21st October, 2003, Government companies are exempt from the applicability of provisions of Section 274(1)(g) of the Companies Act, 1956.

Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements."

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, fixed assets have been physically verified by the management at the end of the year. Considering the size of the Company and nature of its fixed assets, no material discrepancies were noticed on such verification.

c) The fixed assets disposed off during the year did not constitute a substantial part of the total fixed assets and therefore do not affect the going concern assumption.

2. a) As explained to us, the inventories were physically verified by the management at the end of the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on physical verification between physical stock and book records were not material and have been adequately dealt within the books of account.

3. The Company has neither granted any secured/unsecured loans to, nor taken secured/unsecured loans from, any Company, firm or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

4. The Company has adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of stores, raw material including components, plant and machinery, equipment and other assets and for sale of goods. We have not come across any major weakness in internal control.

5. There are no transactions, which need to be entered in register maintained under section 301 of the Act.

6. The company has not accepted any deposits from public during the year.

7. In our opinion, the internal audit system prevalent in the Company is commensurate with the size of the Company and the nature of its business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9. a) According to the records of the Company, it is regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues with appropriate authorities. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues, which have remained outstanding as at 31st March 2013 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 were no disputed amounts in respect of income tax, sales tax, custom duty, excise duty, etc which were outstanding in the books of accounts as at 31st March 2013. However, the following demands have been raised in respect of disputed dues pending before various statutory authorities :

(i) The excise and custom duty demand of Rs. 30.20 lacs is disputed with excise and custom department.

(ii) The Sales Tax demand including interest aggregating to Rs. 14.85 lacs (net of pre-deposit) is disputed and the appeal is pending at the office of Sales Tax Appellate Tribunal, Andhra Pradesh.

10. The Company does not have any accumulated losses. The Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to Chit fund, Nidhi or mutual benefit fund, society are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures or other investments. Hence, requirements of paragraph 4(xiv) are not applicable to the Company.

15. According to information and explanations given to us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

16. The Company has not obtained any term loans during the year.

17. According to the cash flow statement and other records examined by us and on the basis of information and explanations given to us, funds raised on short-term basis have not been used for long-term investment.

18. The company has not made preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money through public issue of shares during the year.

21. Based upon the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For Raj Gupta & Co.

Chartered Accountants

FRN : 000203N



Raj Kumar Gupta

Place : Chandigarh Partner

Date : May 30, 2013 Membership No: 017039


Mar 31, 2010

1. We have audited the attached Balance Sheet of Punjab Communications Limited ("the Company) as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; (ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; (iv) Subject to our observations in para (vii) below, we are of the opinion that the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; (v) In terms of Government of India, Department of Corporate Affairs Notification No. GSR 829(E) dated 21" October, 2003, Government companies are exempt from the applicability of provisions of Section 274(1 )(g) of the Companies Act, 1956; (vi) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any rules under the said section prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company. (vii) a) Attention is invited to Note No. 14 of schedule 23 regarding realization of investment ofRs. 700 lacs in the Bonds of UP Co-operative Spinning Mills Federation Ltd and interest ofRs. 968.43 lacs accruing up to 12.07.2005 consequent to the ex-parte decree awarded by Court against the UP State Government, which is pending for execution before the lower court. In view of the uncertainty involved in the realization of interest, the interest accrued amounting to Rs. 968.43 lacs up to 12.07.2005 i.e. date of deposit of the decreed amount by the UP Government, and for the period subsequent thereto, has not been recognized as income.

b) Reference is invited to Note No. 12 of schedule 23 regarding revenue recognition ofRs. 27.79 lacs in respect of sales for which risks and rewards of ownership have remained with the Company which is in contravention of Accounting Standard on revenue recognition AS-9 issued by the Institute of Chartered Accountants of India.

c) As detailed at Accounting Policy 1(b) of Schedule 22, certain items of income and expenditure have been accounted for on cash basis. Impact of such treatment on profits of the year has not been ascertained.

Subject to the above, we are of the opinion that to the best of our information and according to the explanations given to us, the said accounts, read together with notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date.

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

(As referred to in paragraph 3 of our report of even date)

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, fixed assets have been physically verified by the management at the end of the year. Considering the size of the Company and nature of its fixed assets, no material discrepancies were noticed on such verification.

c) The fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

2. a) As explained to us, the inventories were physically verified by the management at the end of the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.

3. The Company has neither granted any secured/unsecured loans to, nor taken secured/unsecured loans from, any Company, firm or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

4. The Company has adequate internal control procedures commensurate with the size and nature of its business with regard to purchase of stores, raw material including components, plant & machinery, equipment and other assets and for sale of goods. We have not come across any major weakness in internal control.

5. There are no transactions, which need to be entered in register maintained under section 301 of the Act.

6. The Company has not accepted any deposits from the public during the year.

7. In our opinion, the internal audit system prevalent in the Company is commensurate with the size of the Company and the nature of its business.

8. We have been informed that the Central Government has not prescribed the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of any of the Companys products.

9. a) According to the records of the Company, it is regular in depositing undisputed statutory dues including

provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues with appropriate authorities. According to . the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues, which have remained outstanding as at 31 * March 2010 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 were no disputed amounts payable in respect of income tax, sales tax and custom duty which were outstanding as at 31st March 2010 except as discussed below.

(i) The excise duty demand including penalty and interest aggregating to Rs. 268.94 lacs (net of pre- deposit) is disputed and the appeal is pending before the Central Excise Tribunal;

(ii) The excise and custom duty demand of Rs. 31.90 lacs is disputed with excise and custom department.

(iii) The Sales Tax demand including interest aggregating to Rs. 5.04 lacs (net of pre-deposit) is disputed and the appeal is pending at the office of Commissioner Appeals, Commercial Taxes, Uttar Pradesh.

10. The Company has no accumulated losses. The Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to Chit fund, Nidhi or mutual benefit fund, society are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures or other investments. Hence, requirements of paragraph 4(XIV) are not applicable to the Company.

15. According to information and explanations given to us, the Company has not given any guarantee in respect of loans taken by others from banks or financial institutions.

16. The Company has not obtained any term loans during the year.

17. According to the cash flow statement and other records examined by us and on the basis of information and explanations given to us, funds raised on short-term basis have not been used for long-term investment.

18. During the year, the Company has not issued and allotted any shares.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money through public issue of shares during the year.

21. Based upon the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For Raj Gupta & Co.

Chartered Accountants

FRN: 000203N

Raj Kumar Gupta Place: Chandigarh Partner

Dated: August 11, 2010 Membership Number: 017039

 
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