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PCS Industries
BSE: 517119|ISIN: INE834B01012|SECTOR: Computers - Hardware
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« Mar 12
Auditor's Report (PCS Industries) Year End : Mar '13
Report on the Financial Statements:
 
 I have audited the accompanying fnancial statements of PCS Technology
 Limited (the Company), which comprise the Balance Sheet as at March
 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement
 for the year then ended, and a summary of signifcant accounting
 policies and other explanatory information.
 
 Management''s Responsibility for the Financial Statements:
 
 Management is responsible for the preparation of these fnancial
 statements that give a true and fair view of the fnancial position,
 fnancial performance and cash fows of the Company in accordance with
 the Accounting Standards referred to in sub- section (3C) of section
 211 of the Companies Act, 1956 (the Act). This responsibility
 includes the design, implementation and maintenance of internal control
 relevant to the preparation and presentation of the fnancial statements
 that give a true and fair view and are free from material misstatement,
 whether due to fraud or error.
 
 Auditor''s Responsibility:
 
 My responsibility is to express an opinion on these fnancial statements
 based on my audit. I conducted my audit in accordance with the
 Standards on Auditing issued by the Institute of Chartered Accountants
 of India. Those Standards require that I comply with ethical
 requirements and plan and perform the audit to obtain reasonable
 assurance about whether the fnancial statements are free from material
 misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosures in the fnancial statements. The procedures
 selected depend on the auditor''s judgment, including the assessment of
 the risks of material misstatement of the fnancial statements, whether
 due to fraud or error. In making those risk assessments, the auditor
 considers internal control relevant to the Company''s preparation and
 fair presentation of the fnancial statements in order to design audit
 procedures that are appropriate in the circumstances. An audit also
 includes evaluating the appropriateness of accounting policies used and
 the reasonableness of the accounting estimates made by management, as
 well as evaluating the overall presentation of the fnancial statements.
 
 I believe that the audit evidence I have obtained is suffcient and
 appropriate to provide a basis for my audit opinion.
 
 Opinion:
 
 In my opinion and to the best of my information and according to the
 explanations given to me, the fnancial statements give the information
 required by the Act in the manner so required and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2013;
 
 (b) in the case of the Statement of Proft and Loss, of the proft for
 the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash fows for the
 year ended on that date.
 
 Report on Other Legal and Regulatory Requirements
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Act, I give in the Annexure a
 statement on the matters specifed in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Act, we report that:
 
 a.  I have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b.  in my opinion proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books;
 
 c.  the Balance Sheet, Statement of Proft and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account;
 
 d.  in my opinion, the Balance Sheet, Statement of Proft and Loss, and
 Cash Flow Statement comply with the Accounting Standards referred to in
 subsection (3C) of section 211 of the Companies Act, 1956;
 
 e.  on the basis of written representations received from the directors
 as on March 31, 2013, and taken on record by the Board of Directors,
 none of the directors is disqualifed as on March 31, 2013, from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956.
 
 f.  Since the Central Government has not issued any notifcation as to
 the rate at which the cess is to be paid under section 441Aofthe
 Companies Act, 1956 nor has it issued any Rules under the said section,
 prescribing the manner in which such cess is to be paid, no cess is due
 and payable by the Company.
 
 ANNEXURE TO THE AUDITOR''S REPORT
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fxed
 assets.
 
 (b) The assets have been physically verifed by the management during
 the year and no discrepancies were noticed on such verifcation.
 
 (c) The fxed assets disposed off during the year, do not constitute a
 substantial part of the fxed assets of the Company.
 
 (ii) (a) The inventory has been physically verifed during the year by
 the management. In my opinion, the frequency of verifcation is
 reasonable.
 
 (b) The procedures of physical verifcation of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verifcation between the physical stocks and
 the book records were not material.
 
 (iii) (a) The Company has not granted any loans, secured or unsecured
 to companies, frms or other parties covered in the register maintained
 under Section 301 of the Companies Act, 1956. Therefore, the provisions
 of sub-clauses (a) to (d) of clause (iii) of paragraph 4 of the Order
 are not applicable to the Company.
 
 (b) The Company has taken loans from fve parties covered in the
 register maintained under section 301 of the Companies Act, 1956. The
 maximum amount involved during the year was Rs.70.98 lakhs and the
 balance at the end of the year is Rs.9.98 lakhs.
 
 (c) In my opinion, the rate of interest and other terms and conditions
 on which loans have been taken from the companies, frms or other
 parties listed in the register maintained under section 301 of the
 Companies Act, 1956 are, not prima facie, prejudicial to the interest
 of the Company.
 
 (d) There is no stipulation as to the time period for payment of the
 principal amount of unsecured loans taken.
 
 (iv) In my opinion and according to the information and explanations
 given to me, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of business
 with regard to purchases of inventory, fxed asset and with regard to
 the sale of goods and services. During the course of my audit, no major
 weakness has been noticed in internal control system.
 
 (v) (a) In my opinion and according to the information and explanations
 given to me, the particulars of contracts or arrangements referred to
 in section 301 of the Act have been entered in the register required to
 be maintained under that section.
 
 (b) In my opinion, and according to the information and explanations
 given to me, the contracts and arrangements entered in the register
 maintained under section 301 of the Companies Act, 1956 have been made
 at prices which are reasonable having regard to the prevailing market
 price.
 
 (vi) The Company has not accepted any deposits from the public and
 hence, the provisions of clause (vi) of paragraph 4 of the Order are
 not applicable to the Company.
 
 (vii) In my opinion and according to the information and explanations
 given to me, there is an adequate internal audit system commensurate
 with the size of the Company and the nature of its business.
 
 (viii) On the basis of the records, I am of the opinion that
 prima-facie the cost records and accounts prescribed by the Central
 Government under Section 209(1)(d) of the Companies Act 1956 have been
 made and maintained in respect of the Company''s product to which the
 said rule are made applicable. However, I have not carried out any
 detailed examination of such accounts and records.
 
 (ix) (a) The Company is generally regular in depositing undisputed
 statutory dues including provident fund, investor education and
 protection fund, employees'' state insurance, income tax, sales tax,
 wealth tax, service tax, custom duty, excise duty, cess and other
 statutory dues with the appropriate authorities.
 
 According to the information and explanations given to me, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees'' state insurance, income tax,
 sales tax, wealth tax, service tax, custom duty, excise duty, cess and
 other statutory dues were in arrears as at 31st March 2013 for a period
 of more than six months from the date they became payable.
 
 (b) According to the information and explanations given to me, the
 status of disputed dues payable in respect of income tax, sales tax,
 wealth tax, service tax, custom duty, excise duty and cess, as at 31st
 March 2013 is as follows:
 
 1 The Company has received a show cause notice u/s 73 of Finance Act
 1994 from Commissioner Of Service Tax, Mumbai demanding Rs.4,69,24,929
 on import of software under category of Intellectual Property Rights
 for the period Dec 2004 – Mar 2009.
 
 The Company has obtained fled its reply denying the demand as the
 Service Tax on this kind of service was not applicable.
 
 2 The Company has received a demand of Rs.19,12,633 from the
 Commissioner Of Central Excise, Pondicherry u/s 11A of Central Excise
 Act imposing Central Excise on pre-loading of software for the period
 September 2006 - March 2010.
 
 The Company has fled an appeal before Appellant Tribunal Central
 Excise, Customs & Service Tax, Chennai. Tribunal has passed the order
 granting stay on the demand. The proceedings are pending before the
 Tribunal at Chennai.
 
 3 The Company has received a demand of Rs.5,04,995 from the
 Commissioner Of Central Excise (Appeal), Vapi on the ground of
 irregular availment of Central Excise during the period April 2004 -
 March 2005.
 
 The Company has fled appeal before Appellant Tribunal Central Excise,
 Customs & Service Tax, Ahmedabad. Tribunal has passed the order
 granting stay on the demand. The proceedings are pending before the
 Tribunal at Ahmedabad.
 
 4 The Company has received a demand of Rs.44,28,762 from the
 Commissioner Of Central Excise(Appeal), Vapi on the ground of irregular
 availment of Central Excise during April 2004 - March 2005.
 
 The Company has fled appeal before Appellant Tribunal Central Excise,
 Customs & Service Tax, Ahmedabad. Tribunal has passed the order
 granting stay on the demand. The proceedings are pending before the
 Tribunal at Ahmedabad.
 
 5 The Company has received a Show Cause Notice from Director of
 Intelligence demanding Rs.  2,15,40,551 u/s 28 of Custom Act 1962 on
 account of Custom Duty on import of OPK from Microsoft during the
 period of April 2006 - March 2007.
 
 The Company is in process of fling suitable reply against the Show
 Cause Notice and the management expects favorable order on merits.  The
 proceedings are pending before Commissioner of Customs, Mumbai.
 
 6 The Company has received a demand of Rs.20,20,103 from Commissioner
 of Customs, Pune demanding differential Custom Duty on import of raw
 material used in manufacturing of copper clad laminates for the period
 from 1997-2002.
 
 The Company has fled appeal before Appellant Tribunal Central Excise,
 Customs & Service Tax, Mumbai. Tribunal has passed the order granting
 stay on the demand. The proceedings are pending before the Tribunal at
 Mumbai.
 
 (x) The Company has no accumulated losses and has not incurred any cash
 losses during the fnancial year covered by my audit or in the
 immediately preceding fnancial year.
 
 (xi) According to the information and explanations given to me, the
 Company has not defaulted in repayment of dues to fnancial institutions
 or banks.
 
 (xii) According to the information and explanations given to me, no
 loans and advances have been granted by the Company on the basis of
 security by way of pledge of shares, debentures and other securities
 and hence the clause (xii) of paragraph 4 of the said Order relating to
 maintenance of documents and records are not applicable.
 
 (xiii) In my opinion, the Company is not a chit fund or a nidhi/ mutual
 beneft fund/ society. Therefore, the provisions of sub-clauses (a) to
 (d) of clause (xiii) of paragraph 4 of the said Order are not
 applicable to the Company.
 
 (xiv) In my opinion, the Company is not dealing in shares, securities
 and debentures and hence, the provisions of clause (xiv) of paragraph 4
 of the said Order are not applicable to the Company.
 
 (xv) In my opinion and according to the information and explanations
 given to me, the Company has not given any guarantee for loans taken by
 others from banks or fnancial institutions.
 
 (xvi) The Company has raised new term loan during the year and the said
 term loan was applied for the purpose for which it was obtained.
 
 (xvii) According to the information and explanations given to me and on
 an overall examination of the Balance Sheet of the Company, I report
 that no funds raised on short- term basis have been used for long-term
 investment.
 
 (xviii) During the year, the Company has made preferential allotment of
 preference shares to promotors'' and promoter group companies covered in
 the register maintained under section 301 of the Act and in my opinion;
 the price at which shares have been issued is not prejudicial to the
 interest of the Company.
 
 (xix) The Company has not issued any Debentures during the fnancial
 year covered by my audit.
 
 (xx) The Company has not raised any money by way of public issue during
 the year.
 
 (xxi) According to the information and explanations given to me, no
 fraud on or by the company has been noticed or reported during the
 course of my audit.
 
                                            For S.C. Bandi & Co.
 
                                            Chartered Accountants 
 
                                            Firm Reg. No.130850W
 
                                            S.C. BANDI
 
 Place: Mumbai                             (Proprietor)
 
 Date: 25th May 2013                        M. No.16932
Source : Dion Global Solutions Limited
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