Auditor Report of PNB Gilts Ltd.
Mar 31, 2017
The Members of PNB Gilts Ltd,
Report on the Financial Statements
We have audited the accompanying financial statements of PNB Gilts Ltd. (âthe Companyâ) which comprise the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risk of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Companyâs preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companyâs internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Board as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2017, its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure âAâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the aforesaid Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts.
(d) In our opinion, the Financial Statements comply with the Accounting Standards referred to in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representation received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2017 from being appointed as a Director in terms of sub-section(2) of Section 164 of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of Companies (Audit and Auditors) Rules, 2014, as amended from time to time, in our opinion and to the best of our information and according to the explanations given to us :
a. The Company has disclosed pending litigations relating to Income Tax in the notes of accounts under Note No.2.34-Contingent liability (claims against the Company not acknowledged as debt) forming a part of financial statements. There is no impact on the financial position in the financial statements of the Company as no provision for the same has been created by the Company during the period under review.
b. The Company does not have any material foreseeable losses on long term contracts including derivative contracts.
c. The Company has transferred Rs, 4,80,999 on 10th October, 2016, being unclaimed final dividend pertaining to financial year 2008-09 to the Investor Education & Protection Fund which was due and supposed to be transferred to Investor Education & Protection Fund by 20th October, 2016. Thus there has been no default in transferring the amounts due and required to be transferred to the Investor Education & Protection Fund.
d. The Company has provided requisite disclosures in the financial statements as to holding as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December,
2016 and these are in accordance with the books of accounts maintained by the Company. (Refer Note 2.37 to the financial statements).
3. As required by the Comptroller and Auditor General of India through directions issued under Section 143(5) of
the Act, we give a report in the attached Annexure C.
(Referred to in Paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date to the Financial Statements of the Company for the year ended March 31, 2017) Based upon the information and explanations furnished to us and the books and records examined by us in the normal course of our audit, we report that:.
(i) (a) The Company has maintained proper records showing full particulars including quantitative details
and situation of fixed assets.
(b) The Company has conducted physical verification of its fixed assets on quarterly basis for the head office and yearly for the branch offices. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of the assets. No material discrepancies were observed during the physical verification of assets.
(c) The Company owns only flats as immovable properties. The title deeds of the flats are in the name of the Company.
(ii) (a) The Companyâs inventory comprising of Treasury Bills and Dated Government Securities are held
in the form of Subsidiary General Ledger (SGL) account maintained with the Reserve Bank of India and the said stock is verified by the management with the confirmation certificate received from Reserve Bank of India on a monthly basis. The stock of other securities held by the Company in de-materialized form with NSDL/SHCIL, is verified by the management with the confirmation certificates received from them on a monthly basis. In our opinion, the frequency of such verification is reasonable. No material discrepancies were observed during the physical verification of inventory as compared to book records.
(iii) In accordance with the legal opinion obtained by the company, the Directors of the Company who are nominees of Punjab National Bank are not to be regarded as concerned or interested. Hence the transactions with Punjab National Bank are not required to be listed in the register to be maintained under Section 189 of the Companies Act, 2013. The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained u/s 189 of the Act. The Company has not taken any loans secured or unsecured from companies, firms or other parties covered in the register maintained u/s 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us, no loans, investments, guarantees and securities have been given by the Company to concerns which are covered under Section 185 of the Companies Act, 2013 and Section 186 of the Companies Act, 2013.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 to Section 76 of the Companies Act, 2013 or any other relevant provisions of the Companies Act, 2013 and rules framed there under.
(vi) In our opinion and according to the information/explanations given to us, maintenance of the cost records for the products/services/activities of the Company has not been prescribed by the Central Government under Section 148(1) of the Companies Act, 2013.
(vii) (a) In our opinion and according to information/explanations given to us, the Company is 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.
(b) In our opinion and according to information/explanations given to us, the Company has some disputes which have resulted into demands under the Income Tax Act, 1961 which have not been deposited. The details of which are given below:
|
Assessment Year |
Amount involved |
Forum where dispute is pending |
|
2010-2011 under Section 143(3) of the Income Tax Act, 1961 |
46.39 |
ITAT |
|
2012-2013 under Section 143(3) of the Income Tax Act, 1961 |
356.58 |
ITAT |
|
2013-2014 under Section 143(3) of the Income Tax Act, 1961 |
205.25 |
CIT Appeals |
|
2010-2011 under Section 271(1)(c) of the Income Tax Act, 1961 |
3.86 |
CIT Appeals |
|
2014-15 under Section 143(3) of the Income Tax Act, 1961 |
277.72 |
CIT Appeals |
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank as applicable.
(ix) In our opinion and according to the information and explanations given to us, the Company has not raised any money out of initial public offer or further public offer (including debt instruments). The Company has not raised any term loan during the year under audit.
(x) According to the information and explanations given to us, we have neither come across any instance of fraud on or by the company noticed or reported during the year nor have we been informed of such case by the management during the course of our audit.
(xi) In our opinion and according to the information and explanations given to us, the managerial remuneration paid by the Company is in accordance with provisions of Section 197 read with Schedule V to the Companies Act, 2013. The Company has also taken requisite approvals as mandated by the provisions of Section 197 in terms of managerial remuneration being paid.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company, thus this para does not apply to it.
(xiii) In our opinion and according to the information and explanations given to us, the Company has complied with requirements of Section 177 of the Companies Act, 2013 and Section 188 of the Companies Act, 2013 in relation to the related parties. The Company has also disclosed the requirements as laid down in the accounting standards in the relation to the related parties in the financial statements in the Note No. 2.25- Related Party Information.
(xiv) In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or convertible debentures during the year under review.
(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with the Directors or persons connected with it during the year under review.
(xvi) In our opinion and according to the information and explanations given to us, the Company is a NBFI already registered under Section 45 I-A of the Reserve Bank of India Act, 1934
Annexure - âBâ to the Independent Auditorâs Report
(Referred to in Paragraph 2 (f) of Report on other Legal and Regulatory Requirements of our report of even date to the Financial Statements of the Company for the year ended 31st March, 2017)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of PNB Gilts Ltd (âthe Companyâ) as of 31 March, 2017 in conjunction with our audit of the 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit.
We conducted our 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.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 companyâs 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 companyâs 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 our 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, 2017, 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 Kapoor Tandon & Co.,
Chartered Accountants .
FRN: 000952C
(Devendra Swaroop Mathur)
Dated : May 12, 2017 Partner
Place : New Delhi Membership No.082570
Mar 31, 2015
We have audited the accompanying financial statements of M/s.PNB Gilts
Ltd. ("the Company") which comprise the Balance Sheet as at March
31,2015, the Statement of Profit and Loss and the Cash Flow Statement
for the year then ended and a summary of the significant accounting
policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's 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 Section 133 of
the Companies Act, 2013 ("the Act"). This responsibility includes the
design, maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risk of material misstatement of the financial
statement, whether due to fraud or error. In making those risk
assessments, the auditor considers the 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 the Management as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles accepted in India.
(a) In the case of the Balance Sheet of the state of affairs of the
Company as at March 31,2015.
(b) In the case of the Statement of Profit & Loss of the profit of the
Company 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, 2015 ("the
Order") in terms of sub-section (11) of Section 143 of the Act, we give
in the Annexure a statement on the matters specified in paragraphs 3
and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
accounts and returns.
(d) In our opinion, the Financial Statements comply with the Accounting
Standards referred to in Section 133 of the Act.
(e) On the basis of the written representation received from the
Directors as on March 31,2015 and taken on record by the Board of
Directors in meeting held on April 29, 2015, none of the Directors is
disqualified as on March 31,2015 from being appointed as a director in
terms of Sub-Section(2) of Section 164 of the Act.
(f) In our opinion, the Company has adequate internal financial
controls system in place and also there is operating effectiveness of
such controls.
(g) In accordance with Para 11 of Rule 11 of Companies (Audit and
Auditors) Rules, 2014 relating to such matters as may be prescribed:
a. In our opinion, the Company has disclosed the impact of pending
litigations in the financial statements.
b. In our opinion, no amount has been transferred by the company in
the Investor Education & Protection Fund during the year and also there
has been no default in transferring any amounts to the Investor
Education and Protection Fund.
c. In our opinion, the Company does not have any material forseeable
losses on long term contracts.
3. In accordance with provisions of Section 143(5) of Companies Act,
2013 and in terms of directions issued by the Comptroller and Auditor
General of India during the course of audit of annual accounts of PNB
Gilts Limited, we report that:
a. The Company has not been selected for disinvestment, thereby there
is no status report on valuation of assets and liabilities which needs
to be examined.
b. The Company has not waived/written off any debt/loan or interest
during the year under consideration.
c. The Company does not have any inventories lying with the third
parties excepting for the securities pledged with RBI/CCIL for availing
secured loans for which proper records have been maintained by the
company. Similarly, the Company has not received any asset as a gift
from the Central Government or other authorities.
d. As informed to us, there are no pending legal cases or arbitrations
pending against the company except the following Income Tax assessments
which are given below:
(Rs. in lacs)
Assessment Amount Forum where dispute is pending
Year involved
2006-2007 198.97 Income Tax Appellate Tribunal,
New Delhi (ITAT)
2010-2011 46.39 Income Tax Appellate Tribunal,
New Delhi (ITAT)
2012-2013 356.58 CIT Appeals
Assessment Reason for pendency
Year
2006-2007 Pending for Fixation of hearing at the ITAT
2010-2011 Pending for Fixation of hearing at the ITAT
2012-2013 Pending for Fixation of hearing at the CIT-Appeals
Out of the above the Income Tax Department has retained and not given
refunds of Rs. 118.60 lacs towards the above outstanding demands. As
per the information and explanations given to us, the Company has
engaged an income tax consultant for carrying out of the day to day tax
compliances, appearances before the Income Tax authorities and arguing
cases at various appellate levels. The Income tax consultant is being
paid a retainership fees of Rs. 20,000 (plus service tax) per month
towards carrying out all the above works.
Annexure to the Auditors' Report
(Referred to in Paragraph 1 of Report on Other Legal and Regulatory
Requirements of our report of even date)
Based upon the information and explanations furnished to us and the
books and records examined by us in the normal course of our audit, we
report that to the best of our knowledge and belief:
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Company has conducted physical verification of its fixed assets
during the year. In our opinion, this periodicity of physical
verification is reasonable having regard to the size of the company and
the nature of the assets. No material discrepancies were observed
during the physical verification of assets.
(ii) (a) The Company's inventory comprising of Treasury Bills and Dated
Government Securities are held in the form of Subsidiary General Ledger
(SGL) account maintained with the Reserve Bank of India and the said
stock is verified with the confirmation certificate received from
Reserve Bank of India. The stock of other securities are held by the
company in de-materialized form with NSDL/SHCIL, and the same is
verified with the confirmation certificates received from them at the
year end. In our opinion, the frequency of such 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 the business.
(c ) The Company is maintaining proper records of inventory. No
discrepancy is noticed on physical verification of inventory as
compared to book records.
(iii) In accordance with the legal opinion obtained by the company, the
Directors of the Company who are nominees of Punjab National Bank are
not to be regarded as concerned or interested. Hence the transactions
with Punjab National Bank are not required to be listed in the register
to be maintained under Section 189 of the Companies Act, 2013. The
Company has not granted any loans secured or unsecured to companies,
firms or other parties covered in the register maintained u/s 189 of
the Act. The company has not taken any loans secured or unsecured from
companies, firms or other parties covered in the register maintained
u/s 189 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of the business for the
purchase of inventories and fixed assets and for the sale of goods and
services. We have not observed any continuing failure to correct major
weakness in internal control system during the course of the audit.
(v) To the best of our knowledge, the Company has not accepted any
deposits from the public within the meaning of Section 73 to 76 of the
Act and Rules framed thereunder.
(vi) To the best of our knowledge and according to the
information/explanations given to us, maintenance of the cost records
has not been prescribed by the Central Government under Section 148(1)
of the Companies Act, 2013.
(vii) To the best of our knowledge and according to
information/explanations given to us, the Company is regular in
depositing undisputed statutory dues including Income Tax, Wealth Tax,
Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other
statutory dues with the appropriate authorities.
However, under the Income Tax Act, the following amounts are under
dispute, the details of which are as under:
(Rs. in lacs)
Assessment Year Amount involved Forum where dispute is
pending
2006-2007 198.97 ITAT
2010-2011 46.39 ITAT
2012-2013 356.58 CIT Appeals
Out of the above the Income Tax Department has retained and not given
refunds of Rs 118.60 lacs towards the above outstanding demands.
All the amounts which are required to be transferred to Investor
Education & Protection Fund have been transferred within time.
(viii) The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the current
financial year and in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders as applicable.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xi) The Company has not raised any term loan during the year under
audit.
(xii) According to the information and explanations given to us, we
have neither come across any instance of fraud on or by the company
noticed or reported during the year nor have we been informed of such
case by the management during the course of our audit.
Dated : April 29, 2015 For Kapoor Tandon & Co.
Place : New Delhi Chartered Accountants
FRN: 000952C
(Himanshu Kapoor)
Partner
Membership No.078180
Mar 31, 2014
We have audited the accompanying financial statements of M/s. PNB Gilts
Ltd ("the Company"), which comprise the Balance Sheet as at March
31, 2014 , the Statement of Profit and Loss and Cash Flow Statement for
the year then ended, and a summary of the significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in sub-section (3C)
of Section 211 of the Companies Act, 1956 ("the Act"). This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance with
the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with the
ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s 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 the 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 the Management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
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 of
the Company for the year ended on that date, and
(c) in the case of 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") as amended issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Act.
(e) On the basis of the written representations received from the
directors as on March 31, 2014 and taken on record by the Board of
Directors in meeting held on April 26, 2014, 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 Act.
Annexure to the Auditors'' report
(Referred to in Paragraph 1 of Report on Other Legal and Regulatory
Requirements of our report of even date) Based upon the information and
explanations furnished to us and the books and records examined by us in
the normal course of our audit, we report that to the best of our
knowledge and belief:-
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has conducted physical verification of its fixed during
the year. In our opinion, this periodicity of physical verification is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies were noticed on such verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
(ii) (a) The company''s inventory comprising of Treasury Bills & Dated
Govt. Securities are held in the form of
Subsidiary General Ledger (SGL) account maintained with the Reserve Bank
of India and the said stock is verified with the confirmation
certificate received from Reserve Bank of India. The stock of other
securities are held by the company in de-materialised form with
NSDL/SHCIL and the same is verified with the confirmation certificates
received from them at the year end. In our opinion, the frequency of
such 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. No
discrepancy is noticed on physical verification of inventory as compared
to book records.
(iii) In accordance with the legal opinion obtained by the company, the
Directors of the Company who are nominees of Punjab National Bank are
not to be regarded as concerned or interested. Hence the transactions
with Punjab National Bank are not required to be listed in the register
to be maintained under Section 301 of the Companies Act, 1956. The
company has not granted any loans secured or unsecured to companies,
firms or other parties covered in the register maintained u/s 301 of the
Act. The company has not taken any loans secured or unsecured from
companies, firms or other parties covered in the register maintained u/s
301 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. We have not observed any continuing failure to correct major
weakness in internal control system during the course of the audit.
(v) In accordance with the legal opinion obtained by the company, the
Directors of the Company who are nominees of Punjab National Bank are
not to be regarded as concerned or interested. Hence the transactions
with Punjab National Bank are not required to be listed in the register
to be maintained under Section 301 of the Companies Act, 1956. Based on
the audit procedures applied by us and according to the information and
explanations given to us, we are of the opinion that there are no
transactions which need to be entered into the register maintained under
Section 301 of the Companies Act, 1956.
(vi) To the best of our knowledge, the Company has not accepted any
deposits from the public within the meaning of Section 58A and 58AA of
the Act and rules framed there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) To the best of our knowledge and according to the
information/explanations given to us, maintenance of the cost records
has not been prescribed by the Central Government under S ection 209(1)
(d) of the Companies Act, 1956.
(ix) To the best of our knowledge and according to information /
explanations given to us the Company is regular in depositing undisputed
statutory dues including Income Tax, Wealth Tax, Sales Tax, Service Tax,
Custom Duty, Excise Duty, Cess and any other statutory dues with the
appropriate authorities. There were no arrears of outstanding undisputed
statutory dues as at the last day of the financial year for a period of
more than six months from the date they become payable.
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the current financial
year and in the immediately preceding financial year.
(xi) In our opinion & according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders as applicable.
(xii) Based on our examination of documents and records, we are of the
opinion that the company has maintained adequate records, where the
company has granted loans and advances on the basis of security by way
of pledge of securities.
(xiii) In our opinion and according to the information and explanations
given to us, the provisions of special statute applicable to a chit fund
or a nidhi/ mutual benefit fund/ societies are not applicable to the
company.
(xiv) According to the information and explanations given to us, the
company is dealing or trading in shares, securities, debentures and
other investments and proper records have been maintained for the same.
All the shares, securities, debentures and other investments are held in
the name of the company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from banks
or financial institutions.
(xvi) The Company has not raised any term loan during the year under
audit.
(xvii) To the best of knowledge and information and explanation given to
us, funds raised on short term basis have not been used for long term
investment.
(xviii)The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under Section
301 of the Companies Act, 1956.
(xix) According to information and explanations given to us, the Company
has not issued any debenture during the year.
(xx) According to information and explanations given to us the Company
has not raised any money by public issues during the year.
(xxi) According to the information and explanations given to us, we have
neither come across any instance of fraud on or by the company noticed
or reported during the year nor have we been informed of such case by
the management during the course of our audit.
For S. Mohan & Co.
Chartered Accountants
(R. K. Mittal)
Place : New Delhi FCA
Date : April 26, 2014 Partner
Membership No. 088767
Mar 31, 2013
1. We have audited the attached Balance Sheet of PNB GILTS LTD. as at
March 31, 2013 and also the Profit and Loss account and the Cash Flow
Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the Companyls
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together tthe orderl) issued by the Central Government of India in
terms of sub- section (4A) of Section 227 of the Companies Act, 1956 of
India (the Act) we enclose in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the annexure referred to in paragraph 3
above, we report that :
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books and proper returns adequate for the purpose of our audit
have been received from liaison offices of the Company.
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred in sub-section (3C) of Section 211 of the Companies
Act, 1956;
v) On the basis of written representation received from the Directors
as on March 31, 2013 and taken on record by the Board of Directors in
meeting held on April 27, 2013 we report that none of the Director is
disqualified as on March 31, 2013 from being appointed as director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies
Act, 1956.
5. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read in conjunction
with the significant accounting policies (Note-1) and notes on accounts
(Note-2), give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India;
a) In the case of Balance Sheet, of the State of affairs of the Company
as at March 31, 2013.
b) In the case of the Profit and Loss Account, of the Profit of the
Company for the year ended on that date.
c) In the case of Cash Flow Statement, of the cash flow for the year
ended on that date.
Annexure referred to in Paragraph 3 of our report of even date to the
members of PNB Gilts Limited, New Delhi on the accounts of the Company
for the year ended March 31, 2013.
Based upon the information and explanations furnished to us and the
books and records examined by us in the normal course of our audit, we
report that to the best of our knowledge and belief:-
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has conducted physical verification of its fixed assets
during the year. In our opinion, this periodicity of physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
(ii) (a) The Companyls inventory comprising of Treasury Bills & Dated
Govt. Securities are held in the form of Subsidiary General Ledger
(SGL) account maintained with the Reserve Bank of India and the said
stock is verified with the confirmation certificate received from
Reserve Bank of India. The stock of other securities are held by the
Company in de-materialised form with NSDL/SHCIL and the same is
verified with the confirmation certificates received from them at the
year end. In our opinion, the frequency of such 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. No
discrepancy is noticed on physical verification of inventory as
compared to book records.
(iii) In accordance with the legal opinion obtained by the Company, the
Directors of the Company, who are nominees of Punjab National Bank, are
not to be regarded as concerned or interested. Hence the transactions
with Punjab National Bank are not required to be listed in the register
to be maintained under Section 301 of the Companies Act,1956. The
Company has not granted any loans secured or unsecured to companies,
firms or other parties covered in the register maintained u/s 301 of
the Act. The Company has not taken any loans secured or unsecured from
companies, firms or other parties covered in the register maintained
u/s 301 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. We have not observed any continuing failure to correct major
weakness in internal control system during the course of the audit.
(v) In accordance with the legal opinion obtained by the Company, the
Directors of the Company, who are nominee of Punjab National Bank are
not to be regarded as concerned or interested. Hence the transactions
with Punjab National Bank are not to be required to be listed in the
register to be maintained under Section 301 of the Companies Act, 1956.
Based on the audit procedures applied by us and according to the
information and explanations given to us, we are of opinion that there
are no transactions, which need to be entered into the register
maintained under Section 301 of the Companies Act, 1956.
(vi) To the best of our knowledge, the Company has not accepted any
deposits from the public within the meaning of Section 58A and 58AA of
the Act and rules framed there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) To the best of our knowledge and according to the
information/explanations given to us, maintenance of the cost records
has not been prescribed by the Central Government under Section
209(1)(d) of the Companies Act, 1956.
(ix) To the best of our knowledge and according to the information /
explanations given to us the Company is regular in depositing
undisputed statutory dues including Income Tax, Wealth Tax, Sales Tax,
Service Tax, Custom Duty, Excise Duty, Cess and any other statutory
dues with the appropriate authorities. There were no arrears of
outstanding undisputed statutory dues as at the last day of the
financial year for a period of more than six months from the date they
become payable.
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the current
financial year and in the immediately preceding financial year.
(xi) In our opinion & according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders as applicable.
(xii) Based on our examination of documents and records, we are of the
opinion that the Company has maintained adequate records, where the
Company has granted loans and advances on the basis of security by way
of pledge of securities.
(xiii) In our opinion and according to the information and explanations
given to us, the provisions of special statute applicable to a chit
fund or a nidhi/ mutual benefit fund/ societies are not applicable to
the Company.
(xiv) According to the information and explanations given to us, the
Company is dealing or trading in shares, securities, debentures and
other investments and proper records have been maintained for the same.
All the shares, securities, debentures and other investments are held
in the name of the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) The Company has not raised any term loan during the year under
audit.
(xvii) To the best of knowledge and information and explanation given
to us, funds raised on short term basis have not been used for long
term investment.
(xviii)The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) According to information and explanations given to us, the
Company has not issued any debenture during the year.
(xx) According to information and explanations given to us, the Company
has not raised any money by public issues during the year.
(xxi) According to the information and explanations given to us, we
have neither come across any instance of fraud on or by the Company
noticed or reported during the year nor have we been informed of such
case by the management during the course of our audit.
For S. Mohan & Co.
Chartered Accountants
(R. K. Mittal)
Date : April 27, 2013 Partner
Place : New Delhi Membership No. 088767
Mar 31, 2012
1. We have audited the attached Balance Sheet of PNB GILTS LTD. as at
March 31, 2012 and also the Profit and Loss account and the Cash Flow
Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the order) issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Companies Act, 1956 of India
(the 'Act'), we enclose in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the annexure referred to in paragraph 3
above, we report that :
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit
ii) In our opinion, proper books of account as required by law have
been kept by the company so far as it appears from our examination of
those books and proper returns adequate for the purpose of our audit
have been received from liaison offices of the company.
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred in sub-section (3C) of Section 211 of the Companies
Act, 1956;
v) On the basis of written representation received from the Directors
as on March 31, 2012 and taken on record by the Board of Directors in
meeting held on May 2, 2012 we report that none of the Director is
disqualified as on March 31, 2012 from being appointed as director in
terms of clause (g) of sub-section (1) of section 274 of the Companies
Act, 1956.
5. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read in conjunction
with the significant accounting policies (Note-1) and notes on accounts
(Note-2), give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India;
a) In the case of Balance Sheet, of the State of affairs of the company
as at March 31, 2012.
b) In the case of the Profit & Loss Account, of the Profit of the
company for the year ended on that date.
c) In the case of Cash Flow Statement, of the cash flow for the year
ended on that date.
Annexure referred to in Paragraph 3 of our report of even date to the
members of PNB Gilts Limited, New Delhi on the accounts of the company
for the year ended March 31, 2012.
Based upon the information and explanations furnished to us and the
books and records examined by us in the normal course of our audit, we
report that to the best of our knowledge and belief:-
(i) (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The company has conducted physical verification of its fixed assets
during the year. In our opinion, this periodicity of physical
verification is reasonable having regard to the size of the company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
(ii) (a) The company's inventory comprising of Treasury Bills & Dated
Govt. Securities are held in the form of Subsidiary General Ledger
(SGL) account maintained with the Reserve Bank of India and the said
stock is verified with the confirmation certificate received from
Reserve Bank of India. The stock of other securities are held by the
company in de-materialised form with NSDL/SHCIL and the same is
verified with the confirmation certificates received from them at the
year end. In our opinion, the frequency of such 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. No
discrepancy is noticed on physical verification of inventory as
compared to book records.
(iii) In accordance with the legal opinion obtained by the company, the
Directors of the company who are nominees of Punjab National Bank are
not to be regarded as concerned or interested. Hence the transactions
with Punjab National Bank are not required to be listed in the register
to be maintained under Section 301 of the Companies Act,1956. The
company has not granted any loans secured or unsecured to companies,
firms or other parties covered in the register maintained u/s 301 of
the Act. The company has taken unsecured loans (Call Money) from
companies, firms or other parties covered in the register maintained
u/s 301 of the Act. The number of parties involved is one and total
amount involved in the transactions is Rs.1220 crores with closing
balance of Rs. NIL. The rate of interest and other terms and conditions
of loans taken are not prima facie prejudicial to the interest of the
company and the company is regular in payment of the principal amount
and interest.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. We have not observed any continuing failure to correct major
weakness in internal control system during the course of the audit.
(v) In our opinion, and according to the information and explanations
given to us, the transactions which need to be entered into the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered and these transactions have been made at prices which
are reasonable having regard to the prevailing market prices at the
relevant time as confirmed to us by the management.
(vi) To the best of our knowledge, the company has not accepted any
deposits from the public within the meaning of Section 58A and 58AA of
the Act and rules framed there under.
(vii) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
(viii) To the best of our knowledge and according to the
information/explanations given to us, maintenance of the cost records
has not been prescribed by the Central Government under Section
209(1)(d) of the Companies Act, 1956.
(ix) To the best of our knowledge and according to the information /
explanations given to us the Company is regular in depositing
undisputed statutory dues including Income Tax, Wealth Tax, Sales Tax,
Service Tax, Custom Duty, Excise Duty, Cess and any other statutory
dues with the appropriate authorities. There were no arrears of
outstanding undisputed statutory dues as at the last day of the
financial year for a period of more than six months from the date they
become payable.
(x) The company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the current
financial year and in the immediately preceding financial year.
(xi) In our opinion & according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders as applicable.
(xii) Based on our examination of documents and records, we are of the
opinion that the company has maintained adequate records, where the
company has granted loans and advances on the basis of security by way
of pledge of securities.
(xiii) In our opinion and according to the information and explanations
given to us, the provisions of special statute applicable to a chit
fund or a nidhi/ mutual benefit fund/ societies are not applicable to
the company.
(xiv) According to the information and explanations given to us, the
company is dealing or trading in shares, securities, debentures and
other investments and proper records have been maintained for the same.
All the shares, securities, debentures and other investments are held
in the name of the company.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) The company has not raised any term loan during the year under
audit.
(xvii) To the best of knowledge and information and explanation given
to us, funds raised on short term basis have not been used for long
term investment.
(xviii) The company has not made any preferential allotment of shares
to companies/firms/parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) According to information and explanations given to us, the
company has not issued any debenture during the year.
(xx) According to information and explanations given to us, the company
has not raised any money by public issues during the year.
(xxi) According to the information and explanations given to us, we
have neither come across any instance of fraud on or by the company
noticed or reported during the year nor have we been informed of such
case by the management during the course of our audit.
For S. Mohan & Co.
Chartered Accountants
(R. K. Mittal)
Date : May 2, 2012 Partner
Place : New Delhi Membership No.088767
Mar 31, 2011
1. We have audited the attached Balance Sheet of PNB GILTS LTD. as at
March 31, 2011 and also the Profit and Loss account and the Cash Flow
Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the CompanyÃs
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together Ãthe orderÃ) issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956 of
India (the ÃActÃ), we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the annexure referred to in paragraph 3
above, we report that :
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
ii) In our opinion, proper books of account as required by law have
been kept by the company so far as it appears from our examination of
those books and proper returns adequate for the purpose of our audit
have been received from liaison offices of the company.
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred in sub-section (3C) of Section 211 of the Companies
Act, 1956;
v) On the basis of written representation received from the Directors
as on March 31, 2011 and taken on record by the Board of Directors in
meeting held on April 30, 2011 we report that none of the Director is
disqualified as on March 31, 2011 from being appointed as director in
terms of clause (g) of sub-section (1) of section 274 of the Companies
Act, 1956.
5. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read in conjunction
with the significant accounting policies (Schedule à 18A) and notes on
accounts (Schedule à 18B), give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India;
a) In the case of Balance Sheet, of the State of affairs of the Company
as at March 31, 2011.
b) In the case of the Profit & Loss Account, of the Profit of the
Company for the year ended on that date.
c) In the case of Cash Flow Statement, of the cash flow for the year
ended on that date.
Annexure referred to in Paragraph 3 of our report of even date to the
members of PNB Gilts Limited, New Delhi on the accounts of the company
for the year ended March 31, 2011.
Based upon the information and explanations furnished to us and the
books and records examined by us in the normal course of our audit, we
report that to the best of our knowledge and belief:-
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has conducted physical verification of its fixed during
the year. In our opinion, this periodicity of physical verification is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
(ii) (a) The companyÃs inventory comprising of Treasury Bills & Dated
Govt. Securities are held in the form of Subsidiary General Ledger
(SGL) account maintained with the Reserve Bank of India and the said
stock is verified with the confirmation certificate received from
Reserve Bank of India. The stock of other securities are held by the
company in de-materialised form with NSDL/SHCIL and the same is
verified with the confirmation certificates received from them at the
year end. In our opinion, the frequency of such 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. No
discrepancy is noticed on physical verification of inventory as
compared to book records.
(iii) In accordance with the legal opinion obtained by the company the
Directors of the Company who are nominees of Punjab National Bank are
not to be regarded as concerned or interested. Hence the transactions
with Punjab National Bank are not required to be listed in the register
to be maintained under section 301 of the Companies Act,1956.The
company has not granted any loans secured or unsecured to companies,
firms or other parties covered in the register maintained u/s 301 of
the Act. The company has taken unsecured loans (Call money) from
companies, firms or other parties covered in the register maintained
u/s 301 of the Act. The number of parties involved is one and total
amount involved in the transactions is Rs.5070 crores with closing
balance of Rs. NIL. The rate of interest and other terms and conditions
of loans taken are not prima prejudicial to the interest of the company
and the company is regular in payment of the principal amount and
interest.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods and
services. We have not observed any continuing failure to correct major
weakness in internal control system during the course of the audit.
(v) In our opinion, and according to the information and explanations
given to us, the transactions which need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered and these transactions have been made at prices which
are reasonable having regard to the prevailing market prices at the
relevant time as confirmed to us by the management.
(vi) To the best of our knowledge the Company has not accepted any
deposits from the public within the meaning of Section 58A and 58AA of
the Act and rules framed there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) To the best of our knowledge and according to the
information/explanations given to us, maintenance of the cost records
has not been prescribed by the Central Government under section
209(1)(d) of the Companies Act, 1956.
(ix) To the best of our knowledge and according to information /
explanations given to us the Company is regular in depositing
undisputed statutory dues including Income Tax, Wealth Tax, Sales Tax,
Service Tax, Custom Duty, Excise Duty, Cess and any other statutory
dues with the appropriate authorities. There were no arrears of
outstanding undisputed statutory dues as at the last day of the
financial year for a period of more than six months from the date they
become payable.
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the current
financial year and in the immediately preceding financial year.
(xi) In our opinion & according to the information and explanations
given to us, the company has not defaulted in repayment of dues to the
financial institution or bank or debenture holders as applicable.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion and according to the information and explanations
given to us, the provisions of special statute applicable to a chit
fund or a nidhi/ mutual benefit fund/ societies are not applicable to
the company.
(xiv) According to the information and explanations given to us, the
company is dealing or trading in shares, securities, debentures and
other investments and proper records have been maintained for the same.
All the shares, securities, debentures and other investments are held
in the name of the company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) The Company has not raised any term loan during the year under
audit.
(xvii) To the best of knowledge and information and explanation given
to us, funds raised on short term basis have not been used for long
term investment.
(xviii) The Company has not made any preferential allotment of shares
to companies/firms/parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) According to information and explanations given to us, the
Company has not issued any debenture during the year.
(xx) According to information and explanations given to us the Company
has not raised any money by public issues during the year.
(xxi) According to the information and explanations given to us, we
have neither come across any instance of fraud on or by the company
noticed or reported during the year nor have we been informed of such
case by the management during the course of our audit.
For S. Mohan & Co.
Chartered Accountants
(R. K. Mittal)
Partner
Membership No. 088767
Date : April 30, 2011
Place: New Delhi
Mar 31, 2010
We have audited the attached Balance Sheet of PNB GILTS LTD., as at
March 31, 2010 and also the Profit and Loss Account and the Cash Flow
Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
Without qualifying our opinion we draw attention to Note No. 12 of
Schedule 19 B pertaining to change in policy regarding transfer of a
portion of Government Securities in the HTM category as permitted by
the RBI vide circular dated August 31, 2009 (subject to certain
conditions) and as a result thereof further diminution in market value
of securities as on March 31, 2010 to the tune of Rs. 213.04 lacs not
provided in the books.
As required by the Companies (Auditors Report) Order, 2003, issued by
the Central Government in terms of Section 227 (4A) of the Companies
Act, 1956, we enclose in the annexure a statement on the matters
specified in paragraphs 4 & 5 of the said order to the extent
applicable to the Company.
Further to our comments in the annexure we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books (and proper returns adequate for the purpose of our audit
have been received from the branches not visited by us).
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the
Directors, as on March 31, 2010 and taken on record by the Board of
Directors in its meeting held on May 3, 2010, we report that none of
the Director is disqualified as on March 31, 2010 from being appointed
as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
(vi) The Govt. has not notified the rate of cess envisaged under
Section 441A(i), of the Companies Act, 1956 hence, no provision/payment
has been made for the same (refer Note no. 14 of schedule 19(B)).
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the said accounts read with the notes
thereon give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(b) in the case of the Profit and Loss Account, of the Profit for the
year ended on that date; and (c ) in the case of Cash Flow Statement,
of the cash flow for the year ended on that date.
Annexure referred to in our report of even date to the members of PNB
Gilts Limited, New Delhi on the accounts of the company for the year
ended March 31, 2010
1. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets. The fixed
assets have been physically verified by the management during the year.
In our opinion, the frequency of verification is reasonable. As
informed to us, no material discrepancies were noticed on such
verification. Further, no substantial part of fixed assets have been
disposed off during the year.
2. (a) The companys stock comprising of Treasury Bills & Dated Govt.
Securities is held in the form of Subsidiary
General Ledger Account, maintained with the Reserve Bank of India. The
said stock in the SGL account was verified with the confirmation
certificate received from the Reserve Bank of India. The stock of other
securities held by the company in de-materialised form in NSDL / SHCIL
was verified with the confirmation certificate received from them at
the year end.
(b) The existing procedures of reconciliation of stock followed by the
management at periodical interval is reasonable and adequate in
relation to the size of the Company and nature of its business.
(c) The company is maintaining proper records of its inventory and no
material discrepancies were noticed on the reconciliation as mentioned
above, as compared with book records.
3. In our opinion and according to the information and explanations
given to us, the internal control procedure for purchase of fixed
assets, companys money market operations and trading in Government
Securities, Corporate Bonds, Debentures and Equities are commensurate
with the size of the company and nature of its business.
4. In accordance with the legal opinion obtained by the company the
Directors of the company who are nominees of Punjab National Bank are
not to be regarded as concerned or interested. Hence the transactions
with Punjab National Bank are not required to be listed in the register
to be maintained under section 301 of the Companies Act, 1956. Further,
for other transactions as required to be entered into the register in
pursuance to Section 301 to the Companies Act, 1956 have been entered.
Further, these transactions have been made at prices which are
reasonable having regard to the prevailing market price as observed
from test check basis.
5. The Company has not accepted any deposits from the public, hence
the provisions of Section 58A & 58AA of the Companies Act, 1956 are not
applicable.
6. The Company has an Internal Audit System which in our opinion is
commensurate with the size of the company and nature of its business.
7. (a) According to the records made available and information
provided to us, the company is regular in depositing
undisputed statutory dues like Provident Fund, Investor Education and
Protection Fund, Service Tax and other Statutory Dues with the
appropriate authorities. Further, as explained to us, the provisions
for Employee State Insurance, Sales Tax, Wealth Tax, Customs Duty,
Excise Duty are not applicable to the company during the year. In the
absence of notification/ guidelines for levy of Cess towards
rehabilitation of Sick Industries, the dues remain unascertained and
not deposited. However, in respect of undisputed Advance Income Tax
there have been delays by the Company in depositing the same. The
arrears of Advance Income Tax outstanding beyond six months as on March
31, 2010 are as follows:-
Name of the Statute Nature of Amount
the dues (Rs. in lacs)
The Income Tax Act, 1961 Advance 54.49
Income Tax
The Income Tax Act, 1961 Advance 511.41
Income Tax
Name of the Statute Period to which Due date Date of
the amount payment
relates (with interest)
The Income Tax Act, 1961 1st Installment 15.06.09 28.04.10
of Advance Tax
for 2009-10
The Income Tax Act, 1961 2nd Installment 15.09.09 28.04.10
of Advance Tax
for 2009-10
(b) According to the information and explanation given to us there are
no dues of Income Tax/ Service Tax and other Statutory Dues, which have
not been deposited on account of any dispute.
8. According to information and explanation given to us, the Company
has not defaulted in repayment of dues to the financial institution /
bank / debenture holder during the year.
9. In respect of the Companys dealings in Treasury Bills, Certificate
of Deposits, Commercial Paper, Dated Govt. Securities, Corporate Bonds,
Debentures and Equities, proper records have been maintained and timely
entries have been made thereof. Since the principal business of the
company consists of buying and selling of securities, the provisions of
Section 49(1) of the Companies Act, 1956, regarding holding of
investments in its own name are not applicable to it.
10. According to the information and explanation given to us, no fraud
has been committed to or by the Company during the year.
11. The provisions of para (iii), (viii), (x), (xii), (xiii), (xv),
(xvi), (xvii), (xviii), (xix) and (xx) are not applicable during the
year ended March 31, 2010.
For Bansal R. Kumar & Associates
Chartered Accountants
(R. K. Gupta)
Date : May 3, 2010 Partner
Place : New Delhi Membership No. 86851
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