| Report on Financial Statements
We have audited the accompanying financial statements of PALCO Limited
(Formerly known as Pennar Aluminium Company Limited) ("the
Company"), which comprise the Balance Sheet as at March 31, 2014, and
the Statement of Profit and Loss and Cash Flow Statement for the year
then ended, and a summary of significant accounting policies and other
explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with the General
Circular 15/2013 dated 13th September, 2013 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 givea true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's 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 judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the
Company's preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control. 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 31,2014;
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 Regularity Requirements
1. As required by the Companies (Auditor's Report) Order, 2003
("theOrder") 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, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards notified under
the Act read with the General Circular 15/2013 dated 13th September,
2013 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 31,2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure to Independent Auditor's Report
Referred to as in paragraph 1 of our report of even date.
1) In respect of its fixed assets.
All the fixed assets of the Company were sold and the Company will not
be able to continue as a going concern.
2) In respect of its inventories:
The Company has no inventory during the period. Accordingly, the
provisions of clause (ii) of paragraph 4(A) of the Companies (Auditor's
Report) Order, 2003 as amended (the Order) in respect of inventories
are not applicable to the Company.
3) In respect of loans secured or unsecured, granted or taken by the
Company to/from companies, firms or others covered in the register
maintained under section 301 of the Companies Act,1956:
i) Company has taken interest free unsecured loan for an amount of
Rs.3,013,246/- (including loan taken during the year Rs.8,19,471/-)
from parties covered in the Register maintained under section 301 of
the Companies Act,1956.
ii) According to the information and explanations given to us, we are
of the opinion, the terms and conditions on which loan taken by the
company from such parties listed in the register maintained under
section 301 of the companies act, 1956 are not, prima facie,
prejudicial to the interest of the company.
iii) There is no overdue amount in-respect of loan taken from parties
listed in the register maintained under section 301 of the Companies
Act, 1956, the question of statement on the steps taken for payment of
the Principal, and overdue amount of more than one lakh does not arise.
iv) In our opinion, the Company has not granted any loans to parties
covered in the Register maintained under section 301 of the Companies
Act, 1956.
4) In our opinion and according to the information and explanations
given to us, there are adequateinternal control procedures commensurate
with the size of the Companyand the nature of its business, for the
purchase of inventory, fixedassets and for the sale of goods. During
the course of our audit, based on our audit procedures applied,
we have not observed any continuingfailure to correct major weaknesses
in internal control.
5) a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the
particulars of contracts or arrangements referred to in section 301 of
the Act have been entered in the register required to be maintained
under that section.
b) As per information & explanations given to us and in our opinion,
the transaction entered into by the company with parties covered u/s
301 of the Act does not exceeds five lacs rupees in a financial year
therefore requirement of reasonableness of transactions does not
arises.
6) In our opinion and according to the information and explanations
given to us, the Company hasnot accepted any deposits as defined under
Section 58 A of the Companies Act, 1956.
7) In our opinion, the Company does not have an independent internal
audit system commensurate with the size and nature of its business.
8) The Company does not have cost records for the year under review, as
the operations were stopped due to sale of all the Fixed Assets.
9) In respect of statutory dues:
According to the books and records of the Company, and according to the
explanations and information given to us, during the year under review,
there are no undisputed statutory dues payable including Provident
Fund, Investor education & protection fund, Income tax, Sales tax,
Wealth tax, Custom duty, Excise duty, Cess and other statutory dues
applicable to it. According to the information and explanations given
to us, there are no disputed amounts payable in respect of such
statutory dues which have remained outstanding as at 31st March, 2014
for a period exceeding six months from the date they became payable.
10) The Company has accumulated losses at the end of the year that are
more than hundred percent of its net worth and incurred cash losses
during the financial year covered by our audit and had incurred cash
losses in the immediately preceding financial year.
11) As per the records of the Company and according to the information
and explanations given to us, we are of the opinion that the company
has not defaulted in repayment of dues to financial institutions, banks
or debenture holders.
12) According to the information and explanations given to us, the
Company has not given any 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. Accordingly the provisions of clause 4(xiii) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the Company.
14) The Company has not dealt or traded in shares, securities, and
debentures and other investments during the period. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
15) According to the information and explanations given to us, the
Company has not given guarantees for loans taken by the others from
banks or financial institutions.
16) In our opinion and according to the information and explanations
given to us, during the year the Company has not raised any fresh term
loans.
17) ccording to the information and explanations given to us and on an
overall examination of statements and records of the Company, that the
funds raised on short-term basis have, prima facie, not been used
during the year for long-term investment.
18) The Company has not made any preferential allotment of
shares/securities during the year to parties and companies covered in
the register maintained under section 301 of the companies act, 1956.
19) No debentures have been issued by the company during the year and
hence, the question of creating securities in respect thereof does not
arise.
20) The Company has not raised money by way of public issue during the
year.
21) On the basis of our examination and according to the information
and explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For RAMBABU & Co.
Chartered Accountants
Firm Reg. No.002976S
Ravi Rambabu
Partner
Place: Hyderabad M No: 018541
Date: 13-05-2014
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