Auditor Report of PCS Technology Ltd.
Mar 31, 2023
PCS TECHNOLOGY LIMITED
Report on the Audit of the Standalone Financial Statements of PCS Technology Ltd (âthe Companyâ) for the year ended as on March 31, 2023
Opinion:
We have audited the accompanying Standalone financial statements of PCS TECHNOLOGY LIMITED (âthe Companyâ) which comprise the standalone Balance Sheet as at March 31, 2023, the Standalone Statement of Profit and Loss (Including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
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 Companies Act, 2013, as amended, (âthe Actâ) 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 31 March 2023, and profit and other comprehensive income, 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) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters:
Key audit matters (âKAMâ) are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matters described below to be thekey audit matters to be communicated in our report
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SR NO |
KEY AUDIT MATTER |
AUDIT PROCEDURE |
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1 |
IND AS 115- REVENUE FROM CONTRACTS WITH CUSTOMERS |
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The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognised over a period. Additionally, new revenue accounting standard contains disclosures which involve collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Refer Note 2.(D) to the Standalone Financial Statements |
We assessed the Companyâs process to identify the impact of adoption of the revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: 1. Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. 2. Tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price. 3. Tested the relevant information technology systemsâ access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard. 4. On selected samples of contracts, we tested that the revenue recognized is in accordance with the accounting standard by - a) Evaluating the identification of performance obligation; b) Testing managementâs calculation of the estimation of contract cost and onerous obligation, if any |
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We: |
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⢠Observed that the estimates of cost to complete were reviewed and approved by appropriate levels of management; ⢠Performed a retrospective review of costs incurred with estimated costs to identify significant variations and verify whether those variations have been considered in estimating the remaining costs to complete the contract; ⢠Assessed the appropriateness of work in progress (contract assets), if any, on balance sheet by evaluating the underlying documentation to identify possible delays in achieving milestones which may require change in estimated costs to complete the remaining performance obligations; and ⢠Performed test of details including analytics to determine reasonableness of contract costs ⢠The operations for IT and IT enabled Services is much lower as compared to previous years due to the management decisions. ⢠The operational income from these IT and ITeS is not exceeding the Interest Income that is generated from Investment in Bonds and Other Securities. |
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SR NO |
KEY AUDIT MATTER |
AUDIT PROCEDURE |
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IND AS 109- FINANCIAL INSTRUMENTS |
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The application of this Accounting Standard involves identification, valuation and reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements The most significant areas are: 1. Preference Share Capital 2. Impairment of Bonds |
Our audit procedures included: 1. Evaluation of the appropriateness of procedure of the identification and classification by the Company 2. Assessed the measurement and valuation done by the company of the above identified assets and liability 3. Evaluated the appropriateness of the impairment principles and its reversal based on the requirements of Ind AS 109 4. We obtained an understanding of the managementâs processes, systems and controls implemented in relation to impairment allowance process. 5. Assessed the design and implementation of key internal financial controls over loan impairment process used to determine the impairment charge. 6. We used our internal specialist to test the model methodology and reasonableness of assumptions used. 7. We tested the management review controls over measurement of impairment allowances and disclosures in financial statements. |
Information Other than the Financial Statements and Auditorsâ Report Thereon:
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone financial statements and our auditorsâ report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in audit or otherwise appears to be materially misstated.
If, based on work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. 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 judgments 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of user taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the Standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
4. Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the Standalone IND AS financial statements, including the disclosures, and whether the Standalone IND AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore key audit matters .We describe these matters in our auditorsâ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditorsâ Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2) (A) 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 Company so far as it appears from our examination of those books.
c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023, 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 with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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 as at 31 March 2023 on its financial position in its standalone financial statements - Refer Note 26 to the standalone financial statements.
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company, and
(C) With respect to the matter to be included in the Auditorsâ Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For Vinod K Mehta & Co.,
Chartered Accountants
(Firm Registration No. : 111508W)
Divyesh V Mehta Partner
Membership No.:044293 Mumbai
Date: 23rdMay, 2023
UDIN: 23044293BGPOLL3305
Mar 31, 2016
INDEPENDENT AUDITORSâ REPORT
TO THE MEMBERS OF PCS TECHNOLOGY LIMITED 1. Report on the Standalone Financial Statements
I have audited the accompanying standalone financial statements of PCS Technology Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2016, 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.
2. Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments 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.
3. Auditorâs Responsibility
My responsibility is to express an opinion on these standalone financial statements based on our audit.
4. I 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 there under.
5. I conducted my audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that
I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
6. 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 auditorâs 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 financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
7. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
8. Opinion
In my opinion and to the best of our information and according to the explanations given to me, 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, 2016, and its profit and its cash flows for the year ended on that date.
9. Report on Other Legal and Regulatory Requirements
As required by âthe Companies (Auditorâs Report) Order, 2016â issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), and on the basis of such checks of the books and records of the Company as I considered appropriate and according to the information and explanations given to me, I give in the Annexure-âAâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
10. As required by Section 143 (3) of the Act, I report that:
1. I have sought and obtained all the information and explanations which to the best of I knowledge and belief were necessary for the purposes of my audit.
2. In my 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.
3. 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.
4. In my opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; read with Note 29 to the financial statements for the year ended 31st March 2016, regarding scheme of Amalgamation and Arrangement.
5. On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
6. 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 my separate report in Annexure-âBâ and
7. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in my opinion and to the best of our information and according to the explanations given to me:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 30 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.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The assets have been physically verified by the management during the year and no major discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) (a) The inventory has been physically verified during the year by the management. In my opinion, the frequency of verification is reasonable.
(b) The discrepancies noticed on verification have been properly dealt within the books of accounts.
(iii) The Company has granted interest free unsecured loans to its wholly owned subsidiary in earlier periods.
(a) The terms and conditions of grant of unsecured loans to parties covered under 189 of the Companies Act are not prejudicial to the Companyâs interest.
(b) There is no stipulation as to the time period for payment of the principal amount of unsecured loans granted. Hence, the provisions of sub-clauses (b) and (c) of clause (iii) of paragraph 3 of the Order are not applicable.
(iv) In respect of loans, investments, guarantees, and securities, the provisions of section 185 and 186 of the Companies Act, 2013 have been complied with by the Company.
(v) The Company has not accepted any deposits, hence, the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under are not applicable to the Company.
(vi) The Central Government has not prescribed the maintenance of cost records under sub-section (1) of section 148 of the Companies Act 2013 for any of the products of the Company.
(vii) (a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service-tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities.
According to the information and explanations given to me, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service-tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues were in arrears as at 31st March 2016 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to me, the status of disputed dues payable in respect of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax as at 31st March 2016 is as follows:
1 The Commissioner Of Service Tax, Mumbai has passed an order confirming the demand of Rs.2,29,04,559 (Previous Year: Rs.4,69,24,929) u/s 73 of Finance Act 1994 purchase of software under category of Intellectual Property Rights for the period Dec 2004 - Mar 2009.
The Company has obtained the legal opinion that the software purchase does not attract provisions of Intellectual Property Rights under Service Tax Rules, and now is in process of filing appeal before Appellate Tribunal.
2 The Company has received a demand of Rs.19,12,633 from the Commissioner Of Central Excise, Pondicherry u/s 11A of Central Excise Act imposing Central Excise on pre-loading of software for the period Sept 2006 - Mar 2010.
The Company has filed an appeal before Appellant Tribunal Central Excise, Customs & Service Tax, Chennai. Tribunal has passed the order granting stay on the demand. The proceedings are pending before the Tribunal at Chennai.
3 The Company has received a demand of Rs.5,04,995 from the Commissioner Of Central Excise (Appeal), Vapi on the ground of irregular a ailment of Central Excise during the period Apr 2004 - Mar 2005.
The Company has filed appeal before Appellant Tribunal Central Excise, Customs & Service Tax, Ahmadabad. Tribunal has passed the order granting stay on the demand. The proceedings are pending before the Tribunal at Ahmadabad.
4 The Company has received a demand of Rs.44,28,762 from the Commissioner Of Central Excise (Appeal), Vapi on the ground of irregular a ailment of Central Excise during April 2004 - March 2005.
The Company has filed appeal before Appellant Tribunal Central Excise, Customs & Service Tax, Ahmadabad. Tribunal has passed the order granting stay on the demand.
The proceedings are pending before the Tribunal at Ahmadabad.
5 The Company has received a Show Cause Notice from Director of Intelligence demanding Rs. 2,15,40,551 u/s 28 of Custom Act 1962 on account of Custom Duty on import of OPK from Microsoft during the period of Apr 2006 - Mar 2007.
The proceedings are pending before Commissioner of Customs, Delhi. On the basis of the legal opinion obtained, the matter has merits in favor of the Company. The Company has deposited Rs. 50 lakhs as pre-deposit under protest.
6 The Company has received an order of Rs.43,11,000 in FY 2006-07 from Commissioner of Central Excise (Appeal) Mumbai along with pre-deposit of Rs.15 lakhs on account of alleged non-submission of import documents of various goods under Project Import Regulation Act 1986.
The Company has filed as appeal before CESTAT Mumbai, on the grounds of merits of the case and proceedings are pending. The Hon''ble High Court of Judicature at Bombay has set aside the order of pre-deposit on appeal by the Company.
7 The Company has received a show cause notice u/s 73 of Finance Act 1994 from Commissioner Of Service Tax, Mumbai demanding Rs.25,21,282 on account of wrong a ailment of Cenvat Credit for the period Apr 2012 - Mar 2013.
The Company has filed its reply denying the demand on the merits and grounds.
(viii) According to the information and explanations given to me, the Company has not defaulted in repayment of dues to financial institutions, banks or Government.
(ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) and has not raised term loan during the year. Hence, the provisions of clause (ix) of paragraph 3 of the Order are not applicable to the Company.
(x) According to the information and explanations given to me, no fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations given to me, managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
(xii) The Company is not a Nidhi Company. Hence the provisions of the clause (xii) of paragraph 3 of the Order are not applicable to the Company.
(xiii) According to the information and explanations given to me, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements, as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Hence the provisions of clause (xiv) of paragraph 3 of the Order are not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with directors or persons connected with him. Hence the provisions of clause (xv) of paragraph 3 of the Order are not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Hence the provisions of clause (xvi) of paragraph 3 of the Order are not applicable to the Company.
Report on the Internal Financial Controls under Clause (i) of Sub-section
3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
I have audited the internal financial controls over financial reporting of PCS Technology Limited (âthe Companyâ) as of 31st March 2016 in conjunction with my audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
My responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on my audit. I conducted my audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
My audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. My audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In my opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S.C. Bandi & Co.
Chartered Accountants
Firm Reg. No.130850W
S.C. BANDI
Place: Mumbai (Proprietor)
M.No.16932
Date : 16th May 2016
Mar 31, 2015
I have audited the accompanying standalone financial statements of PCS
Technology 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.
2. 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 standalone 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 the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments 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.
3. Auditor's Responsibility
i. My responsibility is to express an opinion on these standalone
financial statements based on my audit.
ii. I 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.
iii. I conducted my audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that I comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
iv. 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 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 financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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.
v. I believe that the audit evidence I have obtained is sufficient and
appropriate to provide a basis for my audit opinion on the standalone
financial statements.
4. Opinion
In my opinion and to the best of my information and according to the
explanations given to me, 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 and its cash flows for the year
ended on that date.
5. Report on Other Legal and Regulatory Requirements
As required by 'the Companies (Auditor's Report) Order, 2015'
issued by the Central Government of India in terms of sub-section (11)
of section 143 of the Act (hereinafter referred to as the "Order"),
and on the basis of such checks of the books and records of the Company
as I considered appropriate and according to the information and
explanations given to me, I give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
6. As required by Section 143 (3) of the Act, I report that:
i. I have sought and obtained all the information and explanations
which to the best of my knowledge and belief were necessary for the
purposes of my audit.
ii. In my opinion, proper books of account as required by law have been
kept by the Company so far as it appears from my examination of those
books.
iii. 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.
iv. In my opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014; read with
Note 31 to the financial statements for the year ended 31st March 2015,
regarding scheme of Amalgamation and Arrangement.
v. 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.
vi. 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 my opinion and to the best of my information and
according to the explanations given to me:
a. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 30 to the
financial statements;
b. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
c. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE TO THE AUDITOR'S REPORT (i) (a) The Company has maintained
proper records showing full particulars including quantitative
detailsand situation of fixed assets.
(b) The assets have been physically verified by the management during
the year and no major discrepancies were noticed on such verification.
(ii) (a) The inventory has been physically verified during the year by
the management. In my opinion, the frequency of verification is
reasonable.
(b) 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) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) (a) There is no stipulation as to the time period for payment of
the principal amount of unsecured loans granted.
(b) There is no stipulation as to the time period for payment of the
principal amount of unsecured loans granted. Hence, the provisions of
sub-clauses (b) of clause (iii) of paragraph 3 of the Order are not
applicable.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control procedures
commensurate with the size of the Company and the nature of business
with regard to purchases of inventory, fixed asset and with regard to
the sale of goods and services. During the course of my audit, no
major weakness has been noticed in internal control system.
(v) The Company has not accepted any deposits from the public and
hence, the provisions of clause (v) of paragraph 3 of the Order are not
applicable to the Company.
(vi) The Central Government has not prescribed the maintenance of cost
records under Section 209(1) (d) of the Companies Act 1956 for any of
the products of the Company.
(vii) (a) The Company is generally 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,vaue added tax,cess and any other statutory dues with the
appropriate authorities.
According to the information and explanations given to me, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income-tax, sales-tax, wealth tax, service tax, duty
of customs, duty of excise, value added tax, cess and any other
statutory dues were in arrears as at 31st March 2015 for a period of
more than six months from the date they became payable.
(b) According to the information and explanations given to me, the
status of disputed dues payable in respect of income tax, sales tax,
wealth tax, service tax, duty of customs, duty of excise, value added
tax and cess as at 31st March 2015 is as follows:
1 The Commissioner Of Service Tax, Mumbai has passed an order
confirming the demand of Rs.2,29,04,559 (Previous Year: Rs.4,69,24,929)
u/s 73 of Finance Act 1994 purchase of software under category of
Intellectual Property Rights for the period Dec2004 - Mar2009.
The Company has obtained the legal opinion that the software purchase
does not attract provisions of Intellectual Property Rights under
Service Tax Rules, and now is in process of filing appeal before
Appellate Tribunal.
2 The Company has received a demand of Rs.19,12,633 from the
Commissioner Of Central Excise, Pondicherry u/s 11A of Central Excise
Act imposing Central Excise on pre-loading of software for the period
Sept2006 - Mar2010.
The Company has filed an appeal before Appellant Tribunal Central
Excise, Customs & Service Tax, Chennai. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Chennai.
3 The Company has received a demand of Rs.5,04,995 from the
Commissioner Of Central Excise (Appeal), Vapi on the ground of
irregular availment of Central Excise during the period Apr2004 -
Mar2005.
The Company has filed appeal before Appellant Tribunal Central Excise,
Customs & Service Tax, Ahmedabad. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Ahmedabad.
4 The Company has received a demand of Rs.44,28,762 from the
Commissioner Of Central Excise(Appeal), Vapi on the ground of irregular
availment of Central Excise during April 2004 - March 2005.
The Company has filed appeal before Appellant Tribunal Central Excise,
Customs & Service Tax, Ahmedabad. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Ahmedabad.
5 The Company has received a Show Cause Notice from Director of
Intelligence demanding Rs. 2,15,40,551 u/s 28 of Custom Act 1962 on
account of Custom Duty on import of OPK from Microsoft during the
period of Apr2006 - Mar2007.
The proceedings are pending before Commissioner of Customs, Delhi. On
the basis of the legal opinion obtained, the matter has merits in favor
of the Company. The Company has deposited Rs. 50 lakhs as pre-deposit
under protest.
6 The Company has received an order of Rs.43,11,000 in FY 2006-07 from
Commissioner of Central Excise (Appeal) Mumbai on account of alleged
non-submission of import documents of various goods under Project
Import Regulation Act 1986.
The Company has filed as appeal before CESTAT Mumbai, on the grounds of
merits of the case. The Hon'ble High Court of Judicature at Bombay has
set aside the order of CESTAT dated 8th June 2006 for pre-deposit of
Rs.15 lakhs.
7 The Company has received a show cause notice u/s 73 of Finance Act
1994 from Commissioner Of Service Tax, Mumbai demanding Rs.25,21,282 on
account of wrong availment of Cenvat Credit for the period Apr2012 -
Mar2013.
The Company has filed its reply denying the demand on the merits and
grounds.
(c) During the financial year covered by my audit, no amount was
required to be transferred to investor education and protection fund.
(viii) The Company has no accumulated losses and has not incurred any
cash losses during the financial year covered by my audit or in the
immediately preceding financial year.
(ix) According to the information and explanations given to me, the
Company has not defaulted in repayment of dues to financial
institutions or banks.
(x) In my opinion and according to the information and explanations
given to me, the Company has not given any guarantee for loans taken by
others from banks or financial institutions.
(xi) The Company has not raised any new term loan during the year and
therefore clause (xi) of the said Order relating to application of term
loan for the purpose for which it was obtained is not applicable.
(xii) According to the information and explanations given to me, no
fraud on or by the company has been noticed or reported during the
course of my audit.
For S.C. Bandi & Co.
Chartered Accountants
Firm Reg. No.130850W
S.C. BANDI
(Proprietor)
M.No.16932
Place: Mumbai
Date : 30th May 2015
Mar 31, 2014
I have audited the accompanying financial statements of PCS Technology
Limited ("the Company"), which comprise of 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.
Auditor''s Responsibility:
My responsibility is to express an opinion on these financial
statements based on my audit. I conducted my audit in accordance with
the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that I 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 judgement, 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.
I believe that the audit evidence I have obtained is sufficient and
appropriate to provide a base for my audit opinion.
Opinion:
In my opinion and to the best of my information and according to the
explanations given to me, 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
India:
(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, 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.
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, I 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, I report that:
a. I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purpose of my
audit;
b. in my opinion proper books of account as required by law have been
kept by the Company so far as appears from my 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 my 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; read with
note no. 31 of Notes to the Financial Statements for the year ended
31st March 2014, regarding scheme of Amalgamation and Arrangement.
e. on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
section 274 of the Companies Act, 1956.
f. 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
or payable by the Company.
ANNEXURE TO THE AUDITOR''S REPORT
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The assets have been physically verified by the management during
the year and no discrepancies were noticed on such verification.
(c) The fixed assets disposed-off during the year; do not constitute a
substantial part of the fixed assets of the Company.
(ii) (a) The inventory has been physically verified during the year by
the management. In my opinion, the frequency of verification is
reasonable.
(b) 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) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) (a) The Company has granted loans to two parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs.270 lakhs and the
balance at the end of the year is Rs.270 lakhs.
(b) In my opinion, the rate of interest and other terms and conditions
on which loans have been granted to the companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are not prima facie prejudicial to the interest of
the Company.
(c) There is no stipulation as to the time period for payment of the
principal amount of unsecured loans granted. Hence, the provisions of
sub-clauses (c) and
(d) of clause (iii) of paragraph 4 of the Order are not applicable.
(e) The Company has taken loans from five parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs.988 lakhs and the
balance at the end of the year is Rs.330 lakhs.
(f) In my opinion, the rate of interest and other terms and conditions
on which loans have been taken from the companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are not prima facie prejudicial to the interest of
the Company.
(g) There is no stipulation as to the time period for payment of the
principal amount of unsecured loans taken.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control procedures
commensurate with the size of the Company and the nature of business
with regard to purchases of inventory, fixed asset and with regard to
the sale of goods and services. During the course of my audit, no major
weakness has been noticed in internal control system.
(v) (a) In my opinion and according to the information and explanations
given to me, the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained under that section.
(b) In my opinion, and according to the information and explanations
given to me, the contracts and arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 have been made
at prices which are reasonable having regard to the prevailing market
price.
(vi) The Company has not accepted any deposits from the public and
hence, the provisions of clause (vi) of paragraph 4 of the Order are
not applicable to the Company.
(vii) In my opinion and according to the information and explanations
given to me, there is an adequate internal audit system commensurate
with the size of the Company and the nature of its business.
(viii) The Central Government has not prescribed the maintenance of
cost records under Section 209(1) (d) of the Companies Act 1956 for any
of the products of the Company.
(ix) (a) The Company is generally regular in depositing undisputed
statutory dues including provident fund, investor education and
protection fund, employees'' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues with the appropriate authorities.
According to the information and explanations given to me, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income tax,
sales tax, wealth tax, service tax, custom duty, excise duty, cess and
other statutory dues were in arrears 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 me, the
status of disputed dues payable in respect of income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess, as at 31st
March 2014 is as follows:
1 The Commissioner of Service Tax, Mumbai has passed an order
confirming the demand of Rs. 2,29,04,559 (Previous Year: Rs.
4,69,24,929) u/s 73 of Finance Act 1994 purchase of software under
category of Intellectual Property Rights for the period Dec. 2004 -
Mar. 2009.
The Company has obtained the legal opinion that the software purchase
does not attract provisions of Intellectual Property Rights under
Service Tax Rules, and now is in process of filing appeal before
Appellate Tribunal.
2 The Company has received a demand of Rs. 19,12,633 from the
Commissioner of Central Excise, Pondicherry u/s 11A of Central Excise
Act imposing Central Excise on pre-loading of software for the period
Sept. 2006 - Mar. 2010.
The Company has filed an appeal before Appellant Tribunal Central
Excise, Customs & Service Tax, Chennai. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Chennai.
3 The Company has received a demand of Rs. 5,04,995 from the
Commissioner Of Central Excise (Appeal), Vapi on the ground of
irregular availment of Central Excise during the period Apr. 2004 -
Mar. 2005.
The Company has filed appeal before Appellant Tribunal Central Excise,
Customs & Service Tax, Ahmedabad. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Ahmedabad.
4 The Company has received a demand of Rs. 44,28,762 from the
Commissioner of Central Excise(Appeal), Vapi on the ground of irregular
availment of Central Excise during April 2004 - March 2005.
The Company has filed appeal before Appellant Tribunal Central Excise,
Customs & Service Tax, Ahmedabad. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Ahmedabad.
5 The Company has received a Show Cause Notice from Director of
Intelligence demanding Rs. 2,15,40,551 u/s 28 of Custom Act 1962 on
account of Custom Duty on import of OPK from Microsoft during the
period of Apr. 2006 - Mar. 2007.
The proceedings are pending before Commissioner of Customs, Delhi. On
the basis of the legal opinion obtained, the matter has merits in favor
of the Company.
(x) The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by my audit or in the
immediately preceding financial year.
(xi) According to the information and explanations given to me, the
Company has not defaulted in repayment of dues to financial
institutions or banks.
(xii) According to the information and explanations given to me, no
loans and advances have been granted by the Company on the basis of
security by way of pledge of shares, debentures and other securities
and hence the clause (xii) of paragraph 4 of the said Order relating to
maintenance of documents and records are not applicable.
(xiii) In my opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of sub-clauses (a) to
(d) of clause (xiii) of paragraph 4 of the said Order are not
applicable to the Company.
(xiv) In my opinion, the Company is not dealing in shares, securities
and debentures and hence, the provisions of clause (xiv) of paragraph 4
of the said Order are not applicable to the Company.
(xv) In my opinion and according to the information and explanations
given to me, the Company has not given any guarantee for loans taken by
others from banks or financial institutions.
(xvi) The Company has not raised any new term loan during the year and
therefore clause (xvi) of the said Order relating to application of
term loan for the purpose for which it was obtained is not applicable.
(xvii) According to the information and explanations given to me and on
an overall examination of the Balance Sheet of the Company, I report
that no funds raised on short- term basis have been used for long-term
investment.
(xviii) During the year, the Company has not made any preferential
allotment of preference shares to parties and companies covered in the
register maintained under section 301 of the Companies Act, 1956.
(xix) The Company has not issued any Debentures during the financial
year covered by my audit.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) According to the information and explanations given to me, no
fraud on or by the company has been noticed or reported during the
course of my audit.
For S.C. Bandi & Co.
Chartered Accountants
Firm Reg. No.130850W
Place: Mumbai S.C. BANDI
Date: 30th May 2014 (Proprietor)
M. No. 16932
Mar 31, 2013
Report on the Financial Statements:
I have audited the accompanying fnancial statements of PCS Technology
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Proft and Loss and Cash Flow Statement
for the year then ended, and a summary of signifcant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements:
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance and cash fows 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 fnancial statements
that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility:
My responsibility is to express an opinion on these fnancial statements
based on my audit. I conducted my audit in accordance with the
Standards on Auditing issued by the Institute of Chartered Accountants
of India. Those Standards require that I comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the fnancial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements.
I believe that the audit evidence I have obtained is suffcient and
appropriate to provide a basis for my audit opinion.
Opinion:
In my opinion and to the best of my information and according to the
explanations given to me, the fnancial 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:
(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 Statement of Proft and Loss, of the proft for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash fows for the
year ended on that date.
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, I give in the Annexure a
statement on the matters specifed in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. I 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 my 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 Proft and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in my opinion, the Balance Sheet, Statement of Proft 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. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualifed as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notifcation as to
the rate at which the cess is to be paid under section 441Aofthe
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.
ANNEXURE TO THE AUDITOR''S REPORT
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fxed
assets.
(b) The assets have been physically verifed by the management during
the year and no discrepancies were noticed on such verifcation.
(c) The fxed assets disposed off during the year, do not constitute a
substantial part of the fxed assets of the Company.
(ii) (a) The inventory has been physically verifed during the year by
the management. In my opinion, the frequency of verifcation is
reasonable.
(b) The procedures of physical verifcation 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) The Company is maintaining proper records of inventory. The
discrepancies noticed on verifcation between the physical stocks and
the book records were not material.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, frms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Therefore, the provisions
of sub-clauses (a) to (d) of clause (iii) of paragraph 4 of the Order
are not applicable to the Company.
(b) The Company has taken loans from fve parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs.70.98 lakhs and the
balance at the end of the year is Rs.9.98 lakhs.
(c) In my opinion, the rate of interest and other terms and conditions
on which loans have been taken from the companies, frms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are, not prima facie, prejudicial to the interest
of the Company.
(d) There is no stipulation as to the time period for payment of the
principal amount of unsecured loans taken.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control procedures
commensurate with the size of the Company and the nature of business
with regard to purchases of inventory, fxed asset and with regard to
the sale of goods and services. During the course of my audit, no major
weakness has been noticed in internal control system.
(v) (a) In my opinion and according to the information and explanations
given to me, the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained under that section.
(b) In my opinion, and according to the information and explanations
given to me, the contracts and arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 have been made
at prices which are reasonable having regard to the prevailing market
price.
(vi) The Company has not accepted any deposits from the public and
hence, the provisions of clause (vi) of paragraph 4 of the Order are
not applicable to the Company.
(vii) In my opinion and according to the information and explanations
given to me, there is an adequate internal audit system commensurate
with the size of the Company and the nature of its business.
(viii) On the basis of the records, I am of the opinion that
prima-facie the cost records and accounts prescribed by the Central
Government under Section 209(1)(d) of the Companies Act 1956 have been
made and maintained in respect of the Company''s product to which the
said rule are made applicable. However, I have not carried out any
detailed examination of such accounts and records.
(ix) (a) The Company is generally regular in depositing undisputed
statutory dues including provident fund, investor education and
protection fund, employees'' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues with the appropriate authorities.
According to the information and explanations given to me, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income tax,
sales tax, wealth tax, service tax, custom duty, excise duty, cess and
other statutory dues were in arrears 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 me, the
status of disputed dues payable in respect of income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess, as at 31st
March 2013 is as follows:
1 The Company has received a show cause notice u/s 73 of Finance Act
1994 from Commissioner Of Service Tax, Mumbai demanding Rs.4,69,24,929
on import of software under category of Intellectual Property Rights
for the period Dec 2004 Â Mar 2009.
The Company has obtained fled its reply denying the demand as the
Service Tax on this kind of service was not applicable.
2 The Company has received a demand of Rs.19,12,633 from the
Commissioner Of Central Excise, Pondicherry u/s 11A of Central Excise
Act imposing Central Excise on pre-loading of software for the period
September 2006 - March 2010.
The Company has fled an appeal before Appellant Tribunal Central
Excise, Customs & Service Tax, Chennai. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Chennai.
3 The Company has received a demand of Rs.5,04,995 from the
Commissioner Of Central Excise (Appeal), Vapi on the ground of
irregular availment of Central Excise during the period April 2004 -
March 2005.
The Company has fled appeal before Appellant Tribunal Central Excise,
Customs & Service Tax, Ahmedabad. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Ahmedabad.
4 The Company has received a demand of Rs.44,28,762 from the
Commissioner Of Central Excise(Appeal), Vapi on the ground of irregular
availment of Central Excise during April 2004 - March 2005.
The Company has fled appeal before Appellant Tribunal Central Excise,
Customs & Service Tax, Ahmedabad. Tribunal has passed the order
granting stay on the demand. The proceedings are pending before the
Tribunal at Ahmedabad.
5 The Company has received a Show Cause Notice from Director of
Intelligence demanding Rs. 2,15,40,551 u/s 28 of Custom Act 1962 on
account of Custom Duty on import of OPK from Microsoft during the
period of April 2006 - March 2007.
The Company is in process of fling suitable reply against the Show
Cause Notice and the management expects favorable order on merits. The
proceedings are pending before Commissioner of Customs, Mumbai.
6 The Company has received a demand of Rs.20,20,103 from Commissioner
of Customs, Pune demanding differential Custom Duty on import of raw
material used in manufacturing of copper clad laminates for the period
from 1997-2002.
The Company has fled appeal before Appellant Tribunal Central Excise,
Customs & Service Tax, Mumbai. Tribunal has passed the order granting
stay on the demand. The proceedings are pending before the Tribunal at
Mumbai.
(x) The Company has no accumulated losses and has not incurred any cash
losses during the fnancial year covered by my audit or in the
immediately preceding fnancial year.
(xi) According to the information and explanations given to me, the
Company has not defaulted in repayment of dues to fnancial institutions
or banks.
(xii) According to the information and explanations given to me, no
loans and advances have been granted by the Company on the basis of
security by way of pledge of shares, debentures and other securities
and hence the clause (xii) of paragraph 4 of the said Order relating to
maintenance of documents and records are not applicable.
(xiii) In my opinion, the Company is not a chit fund or a nidhi/ mutual
beneft fund/ society. Therefore, the provisions of sub-clauses (a) to
(d) of clause (xiii) of paragraph 4 of the said Order are not
applicable to the Company.
(xiv) In my opinion, the Company is not dealing in shares, securities
and debentures and hence, the provisions of clause (xiv) of paragraph 4
of the said Order are not applicable to the Company.
(xv) In my opinion and according to the information and explanations
given to me, the Company has not given any guarantee for loans taken by
others from banks or fnancial institutions.
(xvi) The Company has raised new term loan during the year and the said
term loan was applied for the purpose for which it was obtained.
(xvii) According to the information and explanations given to me and on
an overall examination of the Balance Sheet of the Company, I report
that no funds raised on short- term basis have been used for long-term
investment.
(xviii) During the year, the Company has made preferential allotment of
preference shares to promotors'' and promoter group companies covered in
the register maintained under section 301 of the Act and in my opinion;
the price at which shares have been issued is not prejudicial to the
interest of the Company.
(xix) The Company has not issued any Debentures during the fnancial
year covered by my audit.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) According to the information and explanations given to me, no
fraud on or by the company has been noticed or reported during the
course of my audit.
For S.C. Bandi & Co.
Chartered Accountants
Firm Reg. No.130850W
S.C. BANDI
Place: Mumbai (Proprietor)
Date: 25th May 2013 M. No.16932
Mar 31, 2012
1) I have audited the attached Balance Sheet of PCS TECHNOLOGY LIMITED
(the 'Company'), as at 31st March 2012, the Statement of Proft and Loss
and the Cash Flow Statement of the Company for the year ended on that
date annexed thereto. These fnancial statements are the responsibility
of the Company's management. My responsibility is to express an opinion
on these fnancial statements based on my audit.
2) I have conducted my audit in accordance with the auditing standards
generally accepted in India. These standards require that I plan and
perform the audit to obtain reasonable assurance about whether the
fnancial statements are free from any material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the fnancial statements. An audit also includes,
assessing the accounting principles used and signifcant estimates made
by management, as well as evaluating the overall presentation of the
fnancial statements. I believe that my audit provides a reasonable
basis for my opinion.
3) As required by the Companies (Auditor's Report) Order, 2003 (the
Rs.Order') issued by the Central Government in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, and on the basis of such
checks of books and records of the Company as I considered necessary
and appropriate and according to the information and explanations given
to me during the course of the audit, I enclose in the Annexure, a
statement on the matters specifed in paragraph 4 and 5 of the said
Order.
4) Further to my comments in the Annexure referred to in paragraph 3
above, I report that:
a) I have obtained all the information and explanations, which to the
best of my knowledge and belief were necessary for the purpose of my
audit.
b) In my opinion proper books of accounts as required by law have been
kept by the Company so far as appears from my examination of those
books.
c) The Balance Sheet, Statement of Proft and Loss and Cash Flow
Statement referred to in this report are in agreement with the books of
accounts.
d) In my opinion the Balance Sheet, Statement of Proft and Loss and the
Cash Flow Statement referred to in this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956.
e) Based on the representations made by the Directors as on 31st March
2012, and taken on record by the Board of Directors of the Company and
the information and explanations given to me, none of the Director is,
as at 31st March, 2012, prima-facie disqualifed from being appointed as
a director in terms of clause (g) of sub-section (1) of section 274 of
the Companies Act, 1956.
f) In my opinion and to the best of my information and according to the
explanations given to me, the said accounts 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:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
ii) in the case of the Statement of Proft and Loss, of the proft of the
Company for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash fows for the
year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fxed
assets.
(b) The assets have been physically verifed by the management during
the year and no discrepancies were noticed on such verifcation.
(c) The fxed assets disposed off during the year, constitute a
substantial part of the fxed assets of the Company, however, in my
opinion, this do not affect the going concern assumption.
(ii) (a) The inventory has been physically verifed during the year by
the management. In my opinion, the frequency of verifcation is
reasonable.
(b) The procedures of physical verifcation 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) The Company is maintaining proper records of inventory. The
discrepancies noticed on verifcation between the physical stocks and
the book records were not material.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, frms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Therefore, the provisions
of sub-clauses (a) to (d) of clause (iii) of paragraph 4 of the Order
are not applicable to the Company.
(b) The Company has taken loans from fve parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 6,898/- lacs and the
balance at the end of the year is Rs. 6,173/- lacs
(c) In my opinion, the rate of interest and other terms and conditions
on which loans have been taken from the companies, frms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are, not prima facie, prejudicial to the interest
of the Company.
(d) There is no stipulation as to the time period for payment of the
principal amount of unsecured loans taken.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control procedures
commensurate with the size of the Company and the nature of business
with regard to purchases of inventory, fxed asset and with regard to
the sale of goods and services. During the course of my audit, no major
weakness has been noticed in internal control system.
(v) (a) In my opinion and according to the information and explanations
given to me, the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained under that section.
(b) In my opinion, and according to the information and explanations
given to me, the contracts and arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 have been made
at prices which are reasonable having regard to the prevailing market
price.
(vi) The Company has not accepted any deposits from the public and
hence, the provisions of clause (vi) of paragraph 4 of the Order are
not applicable to the Company.
(vii) In my opinion and according to the information and explanations
given to me, there is an adequate internal audit system commensurate
with the size of the Company and the nature of its business.
(viii) On the basis of the records, I am of the opinion that
prima-facie the cost records and accounts prescribed by the Central
Government under Section 209(1)(d) of the Companies Act, 1956 have been
made and maintained in respect of the Company's product to which the
said rule are made applicable. However, I have not carried out any
detailed examination of such accounts and records.
(ix) (a) The Company is generally regular in depositing undisputed
statutory dues including provident fund, investor education and
protection fund, employees' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and other
statutory dues with the appropriate authorities.
(b) According to the information and explanations given to me, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, service tax, custom duty, excise duty and cess were in arrears, as
at 31st March, 2012 for a period of more than six months from the date
they become payable.
(x) The Company has no accumulated losses and has not incurred any cash
losses during the fnancial year covered by my audit or in the
immediately preceding fnancial year.
(xi) According to the information and explanations given to me, the
Company has not defaulted in repayment of dues to fnancial institutions
or banks.
(xii) According to the information and explanations given to me, no
loans and advances have been granted by the Company on the basis of
security by way of pledge of shares, debentures and other securities
and hence the clause (xii) of paragraph 4 of the said Order relating to
maintenance of documents and records are not applicable.
(xiii) In my opinion, the Company is not a chit fund or a nidhi/mutual
beneft fund/society. Therefore, the provisions of sub-clauses (a) to
(d) of clause (xiii) of paragraph 4 of the said Order are not
applicable to the Company.
(xiv) In my opinion, the Company is not dealing in shares, securities
and debentures and hence, the provisions of clause (xiv) of paragraph 4
of the said Order are not applicable to the Company.
(xv) In my opinion and according to the information and explanations
given to me, the Company has not given any guarantee for loans taken by
others from banks or fnancial institutions.
(xvi) The Company has raised new term loan during the year and the said
term loan was applied for the purpose for which it was obtained.
(xvii) According to the information and explanations given to me and on
an overall examination of the balance sheet of the Company, I report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any Debentures during the fnancial
year covered by my audit.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) According to the information and explanations given to me, no
fraud on or by the company has been noticed or reported during the
course of my audit.
For S.C. BANDI & CO.
Chartered Accountants
Firm Reg. No. 130850W
S.C.BANDI
Place: Mumbai (Proprietor)
Date : 18th October, 2012 Membership no.16932
Mar 31, 2011
1) I have audited the attached Balance Sheet of PCS TECHNOLOGY LIMITED,
as at 31st March, 2011 and Profit and Loss Account and the Cash Flow
statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's Management. My responsibility is to express an opinion on
these financial statements based on audit.
2) I have conducted audit in accordance with the auditing standards
generally accepted in India. These Standards require that I plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from any material misstatement. An audit
also 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
presentation of the financial statements. I believe that my audit
provides a reasonable basis for my opinion.
3) As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, and on the basis of such checks of books and records of the
Company as I considered necessary and appropriate and according to the
information and explanations given to me during the course of the
audit, enclose in the Annexure, a Statement on the matters specified in
Paragraph 4 & 5 of the said order.
4) Further to my comments in the Annexure referred to in Paragraph 3
above, I report that:
a) I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purpose of
audit.
b) In my opinion proper books of accounts as required by Law have been
kept by the Company so far as appears from my examination of such
books.
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
referred to in this report are in agreement with the books of accounts.
d) In my opinion the Balance Sheet, the Profit and Loss Account and the
Cash Flow Statement complies with the mandatory Accounting Standards
referred to in sub-section (3C) of Section 211 of the Companies Act,
1956.
e) Based on the representations made by the Directors as on 31st March,
2011 and taken on record by the Board of Directors of the Company and
the information and explanations given to me, none of the Director is,
as at 31st March, 2011, prima-facie disqualified from being appointed
as a director in terms of clause (g) of sub-section (1) of Section
" 274 of the Companies Act, 1956.
f) In my opinion and to the best of my information and according to the
explanations given to me, the said accounts 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 :
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011 and
ii) In the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date.
iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(i) The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets. The
assets have been physically verified by the Management during the year
and no discrepancies were noticed on such verification.
(ii) (a) The inventory has been physically verified during the year by
the management. In my opinion, the frequency of verification is
reasonable.
(b) 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) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956.
(b) The Company has taken loans from five parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the period was Rs.7,161/- lacs and the
balance at the end of the period is Rs.6,323/- lacs
(c) In my opinion, the rate of interest and other terms and conditions
on which loans have been taken from the companies, firms or other
parties listed
in the register maintained under section 301 of the Companies Act, 1956
are, not prima facie, prejudicial to the interest of the Company.
(d) There is no stipulation as to the time period for payment of the
principal amount of unsecured loans and advances taken.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control procedures
commensurate with the size of the Company and the nature of business
with regard to purchases of inventory, fixed asset and with regard to
the sale of goods. During the course of my audit, no major weakness has
been noticed in internal control system in respect of these areas.
(v) (a) In my opinion and according to the information and explanations
given to me, the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained under that section.
(b) In my opinion, and according to the information and explanations
given to me, the contracts and arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 have been made
at prices which are reasonable having regard to the prevailing market
price
(vi) The Company has not accepted any deposits from the public and
hence, the provisions of clause 4 (vi) of the Companies (Auditor's
Report) Order 2003 are not applicable to the Company.
(vii) In my opinion and according to the information and explanations
given to me, there is an adequate internal audit system commensurate
with the size of the Company and the nature of its business.
(viii) On the basis of the records, I am of the opinion that
prima-facie the cost records and accounts prescribed by the Central
Government under Section 209(1) (d) of the Companies Act 1956 have been
made and maintained in respect of the Company's product to which the
said rule are made applicable. However, I have not carried out any
detailed examination of such accounts and records.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees' state insurance, income
tax, sales tax, wealth tax, custom duty, excise duty, cess and other
material statutory dues applicable to it.
(b) According to the information and explanations given to me, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, custom duty, excise duty and cess were in arrears, as at 31st
March, 2011 for a period of more than six months from the date they
become payable.
(x) The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by my audit or in the
immediately preceding financial year.
(xi) According to the information and explanations given to me, the
Company has not defaulted in repayment of dues to financial
institutions or banks.
(xii) According to the information and explanations given to me, no
loans and advances have been granted by the Company on the basis of
security by way of pledge of shares, debentures and other securities
and hence the clause (xii) of the said Order relating to maintenance of
documents and records are not applicable.
(xiii) In my opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
(xiv) In my opinion, the Company is not dealing in Shares, Securities
and Debentures and hence, the provisions of clause 4(xiv) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
(xv) In my opinion and according to the information and explanations
given to me, the Company has not given any guarantee for loans taken by
others from Banks or Financial institutions.
(xvi) The Company has raised new Term loan during the year and the said
Term loan was applied for the purpose for which it was obtained.
(xvii) According to the information and explanations given to me and on
an overall examination of the balance sheet of the Company, I report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any Debentures during the financial
year covered by my audit.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) According to the information and explanations given to me, no
fraud on or by the company has been noticed or reported during the
course of my audit.
For S.C. BANDI & CO.
Chartered Accountants
S.C.BANDI
(Proprietor)
Membership no.16932
31st May, 2011
Mar 31, 2010
1) I have audited the attached Balance Sheet of PCS TECHNOLOGY LIMITED,
as at 31st March, 2010 and Profit and Loss Account and the Cash Flow
statement ofsthe Company for the period ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys Management. My responsibility is to express an opinion on
these financial statements based on audit.
2) I have conducted audit in accordance with the auditing standards
generally accepted in India. These Standards require that I plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from any material misstatement. An audit
also 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
presentation of the financial statements. I believe that my audit
provides a reasonable basis for my opinion.
3) As required by the Companies (Auditors Report) Or- der, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, and on the basis of such checks of books and records of the
Company as I considered necessary and appropri- ate and according to
the information and explanations given to me during the course, of the
audit, enclose in the Annexure, a Statement on the matters specified in
Paragraph 4 & 5 of the said order.
4) Further to my comments in the Annexure referred to in Paragraph 3
above, I report that:
a) I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purpose of
audit.
b) In my opinion proper books of accounts as required by Law have been
kept by the Company so far as appears from my examination of such
books.
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
referred to in this report are in agree- ment with the books of
accounts.
d) In my opinion the Balance Sheet, the Profit and Loss Ac- count and
the Cash Flow Statement complies with the mandatory Accounting
Standards referred to in sub-sec- tion (3C) of Section 211 of the
Companies Act, 1956.
e) Based on the representations made by the Directors as on 31st March,
2010 and taken on record by the Board of Directors of the Company and
the information and explanations given to me, none of the Director is,
as at 31st March, 2010, prima-facie disqualified from being appointed
as a director in terms of clause (g) of sub- section (1) of Section 274
of the Companies Act, 1956.
f) In my opinion and to the best of my information and according to the
explanations given to me, the said accounts give the information
required by the Com- panies Act, 1956, in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India :
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010 and
ii) In the case of the Profit and Loss Account, of the profit of the
Company for the period ended on that date.
iii) In the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(i) The Company has maintained proper records showing full particulars
including quantitative details and situa- tion of Fixed Assets. The
assets have been physically verified by the Management during the
period and no discrepancies were noticed on such verification.
(ii) (a) The inventory has been physically verified during the period
by the management. In my opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of invento- ries followed
by the management are reasonable and adequate in relation to the size
of the Com- pany and the nature of its business.
(c) The Company is maintaining proper records of in- ventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) (a) The Company has not granted any loans, se- cured or unsecured
to companies, firms or other parties covered in the register maintained
un- der Section 301 of the Companies Act, 1956.
(b) The Company has taken loans from five parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the period was Rs.6,260/- lacs and the
balance at the end of the period is Rs.6,110/-lacs
(c) In my opinion, the rate of interest and other terms and conditions
on which loans have been taken from the companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are, not prima facie, prejudicial to the interest
of the Company.
(d) There is no stipulation as to the time period for payment of the
principal amount of unsecured loans and advances taken.
(iv) In my opinion and according to the information and explanations
given to me, there are adequate internal control procedures
commensurate with the size of the Company and the nature of business
with regard to purchases of inventory, fixed asset and with regard to
the sale of goods. During the course of my audit, no major weakness has
been noticed in internal control system in respect of these areas.
(v) (a) In my opinion and according to the information and explanations
given to me, the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained under that section.
(b) In my opinion, and according to the information and explanations
given to me, the contracts and arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 have been made
at prices which are reasonable having regard to the prevailing market
price
(vi) The Company has not accepted any deposits from the public and
hence, the provisions of clause 4 (vi) of the Companies (Auditors
Report) Order 2003 are not applicable to the Company.
(vii) In my opinion and according to the information and explanations
given to me, there is an adequate internal audit system commensurate
with the size of the Company and the nature of its business.
(viii) On the basis of the records, I am of the opinion that
prima-facie the cost records and accounts prescribed by the Central
Government under Section 209(1) (d) of the Companies Act 1956 have been
made and maintained in respect of the Companys product to which the
said rule are made applicable. However, I have not carried out any
detailed examination of such accounts and records.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance, income
tax, sales tax, wealth tax, custom duty, excise duty, cess and other
material statutory dues applicable to it.
(b) According to the information and explanations given to me, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, custom duty, excise duty and cess were in arrears, as at 31st
March, 2010 for a period of more than six months from the date they
become payable.
(x) The Company has no accumulated losses and has not incurred any cash
losses during the financial period covered by my audit or in the
immediately preceding financial year.
(xi) According to the information and explanations given to me, the
Company has not defaulted in repayment of dues to financial
institutions or banks.
(xii) According to the information and explanations given to me, no
loans and advances have been granted by the Company on the basis of
security by way of pledge of shares, debentures and other securities
and hence the clause (xii) of the said Order relating to maintenance of
documents and records are not applicable.
(xiii) In my opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
(xiv) In my opinion, the Company is not dealing in Shares, Securities
and Debentures and hence, the provisions of clause 4(xiv) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
(xv) In my opinion and according to the information and explanations
given to me, the Company has not given any guarantee for loans taken by
others from Banks or Financial institutions.
(xvi) The Company has raised new Term loan during the period and the
said Term loan was applied for the purpose for which it was obtained.
(xvii) According to the information and explanations given to me and on
an overall examination of the balance sheet of the Company, I report
that no funds raised on short- term basis have been used for long-term
investment.
(xviii) During the period, the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any Debentures during the financial
period covered by my audit.
(xx) The Company has not raised any money by way of public issue during
the period.
(xxi) According to the information and explanations given to me, no
fraud on or by the company has been noticed or reported during the
course of my audit.
For S.C. BANDI & CO.
Chartered Accountants
S.C.BANDI
(Proprietor)
Membership no. 16932
Place: Mumbai
Date: 31st May, 2010
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