| We have audited the accompanying financial statements of Pal Credit &
Capital Limited ("the Company"), which comprise the Balance Sheet as at
March 31st, 20l4, 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 subsection (3C) of section 211
of the Companies Act, 1956 ("the Act") read with the General Circular
l5/20l3 dated 13th September, 20I3 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act, 2013. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control
relevant to the Company's preparation and fair presentation
of the financial statements in order to design audit procedures
that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used
and the reasonableness of the accounting estimates made by
management, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31st, 2014; and
b) in the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements.
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of 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, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956 read with the General Circular l5/20l3 dated 13th September, 20I3
of the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013;
e) on the basis of written representations received from the directors
as on March 31st, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31st, 2014, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956; and
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 and payable by the
Company.
Annexure to Independent Auditors' Report
Referred to in paragraph 1 under the heading of 'Report on other Legal
and Regulatory Requirements' of Our Report of even date to the Members
of Pal Credit & Capital Limited, on the accounts of the company for the
year ended 31st March, 2014
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that:
1. In respect of its fixed assets
a) The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
c) In our opinion and according to the information and explanations
given to us, no substantial part of the fixed asset has been disposed
during the year.
2. In respect of inventories
The Company has no inventory.
3. a) According to the information and explanations given
to us and on the basis of our examination of the books of account, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties listed in the register maintained under Section
301 of the Companies Act, 1956. Consequently, the provisions of clauses
iii (b), iii(c) and iii (d) of the order are not applicable to the
Company.
b) According to the information and explanations given to us and on the
basis of our examination of the books of account, the Company has taken
unsecured advances from associate company listed in the register
maintained under Section 301 of the Companies Act, 1956.
c) The Company has taken the unsecured advance from one associate
Company wherein the year-end balance is Rs. 186.16 Lakhs (Maximum
balance during the year Rs. 186.16 lakhs (Previous Year (31st March,
2013) Rs.154 lakhs).
d) The rate of interest and other terms and conditions of unsecured
advance taken by the Company are prima - facie not prejudicial to the
interest of the Company.
e) The payment of principal amount and interest are not stipulated.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of fixed assets and payment for expenses.
During the course of our audit, no major instance of continuing failure
to correct any weaknesses in the internal controls has been noticed.
5. In respect of Contracts or Arrangements referred to in Section 301
of the Companies Act, 1956,
a) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of Contracts or
Arrangements that needed to be entered into the register maintained
under Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of Contracts or
Arrangements that needed to be entered into the register maintained
under Section 301 of the Companies Act, 1956 and exceeding the value of
Rupees Five lakhs in respect of each party during the year have been
made at prices which appear reasonable as per information available
with the company.
6. According to the information and explanation given to us the Company
has not accepted any deposits from the public therefore the provision
of clause VI of paragraph 4 of the order are not applicable to the
company.
7. As per information and explanations given by the management, the
Company has an internal audit system commensurate with its size and the
nature of its business.
8. As per information and explanation given by the management,
maintenance of cost records has not been prescribed by the Central
Government under clause (d) of sub-section (1) of section 209 of the
Companies Act, 1956.
9. In respect of statutory dues.
a) According to the records of the company, 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 to the extent applicable and any
other statutory dues have generally been regularly deposited with the
appropriate authorities. According to the information & explanations
given us no undisputed amounts payable in respect of aforesaid dues
were outstanding as at 31st March, 2014 for a period of more than six
months from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues which are not deposited on account of dispute in respect of
Income Tax, Wealth Tax, Sales Tax, Excise, Service Tax, Customs Duty
and Cess in arrears, as at March 31st, 2014 for a period of more than
six months from the date they became payable.
10. The Company has accumulated losses at the end of the year which is
more than fifty percent of its net worth and has incurred cash loss of
Rs. 39.22 Lacs during the year covered by our audit and in the
immediately preceding financial year.
11. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi / mutual benefit
fund/society. Therefore, the provision of this clause of the Companies
(Auditor's Report) Order, 2003 (as amended) is not applicable to the
Company.
14. According to information and explanations given to us, the Company
has Investments. Proper records and timely entries have been maintained
in this regard and further investments specified are held in their own
name.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loan taken by others from a
bank or financial institution.
16. Based on our audit procedures and on the information given by the
management, we report that the company has not raised any term loans
during the year.
17. Based on the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company as at 31st
March, 2014, we report that no funds raised on short-term basis have
been used for long-term investment by the Company.
18. Based on the audit procedures performed and the information and
explanations given to us by the management, we report that the Company
has not made any preferential allotment of shares during the year.
19. The Company has no outstanding debentures during the year under
audit.
20. The Company has not raised any money by public issue during the
year.
21. Based on the audit procedures performed and the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For M. B. Agrawal & Co.
Chartered Accountants
FRN: 100137W
M. B. Agrawal
Partner
M. No. 9045
Place:Mumbai
Date: 29/05/2014
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