To the Members of
PMC Fincorp Limited
Report on the Audit of the Standalone Ind AS Financial Statements Opinion
We have Audited the accompanying Standalone Ind AS Financial Statements of PMC
FINCORP LIMITED ("the Company") which comprise the Balance Sheet as at 31
March 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the
Statement of changes in equity and the Statement of Cash Flows for the year then ended on
that date, and a summary of the Significant Accounting Policies and other explanatory
information (herein after referred to as "the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the
Companies Act, 2013 (‘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 31,2022, its profit Amount of Rs. 181.26 Lacs
and cash out flows for the year ended on that date.
Basis for Opinion
We conducted our Audit in accordance with the Standards on Auditing (SAs) specified
under Section 143(10) of the Companies Act, 2013 (the Act). Our responsibilities under
those Standards are further described in the Auditors Responsibilities for the Audit of
the Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant to our audit of the
financial statement under the provisions of the Companies Act, 2013 and the Rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements of the current period. We
have determined that there are no key audit matters to communicate in our report.
Managements Responsibilities for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section
134 (5) of the Act with respect to the preparation of these Financial Statements that give
a true and fair view of the financial position, financial performance including other
comprehensive income, cash flows and changes in equity of the Company in accordance with
the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with
the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting
Standards) Rules, 2016, as amended from time to time, and other accounting principles
generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of
the financial statement that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the Financial Statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so. The boards of directors are also responsible for overseeing the
Company’s financial reporting process.
Auditors Responsibilities for the Audit of the Financial Statements for the year ended
31st March, 2022
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these Financial Statements.
As part of an Audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 companys internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the Board of Directors.
• Conclude on the appropriateness of the Board of Directors use of the going
concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
Companys ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors report to the
related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditors report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the Financial Statements
of the company to express an opinion on the Financial Statements.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Report on other Legal and Regulatory Requirements
As required by the Companies (Auditor’s Report) Order, 2016 ("the
Order"), issued by the Central Government of India in terms of sub-section (11) of
Section 143 of the Companies Act, 2013, we give in Annexure "A" a
statement on the matters specified in paragraphs 3 and 4 of the Order.
As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from my examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the aforesaid financial statements comply with the accounting
standards specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014;
(e) On the basis of the written representations received from the Directors as on March
31,2022 taken on record by the Board of Directors, none of the Directors is disqualified
as on March 31,2022 from being appointed as a Director in terms of Section 164 (2) of the
Act;
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Company’s internal
financial controls over financial reporting;
(g) With respect to the other matters to be included in the Auditor’s Report in
accordance with the requirements of Section 197 (16) of the Act, as amended, in our
opinion and to the best of our information and according to the explanations given to our,
the remuneration paid by the Company to its directors during the year is in accordance
with the provisions of Section 197 of the Act; and
(h) With respect to the other matters to be included in the Auditor’s Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to our;
a. The Company does not have any pending litigations (except the litigation as
disclosed in Note 28 of the Financial Statements) which would impact its financial
position;
b. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses; and
c. An amount of Rs.3.83 Lacs on account of unclaimed dividend, lying in the separate
bank account opened for that purpose has became due but yet to be transferred to Investor
Education and Protection Fund.
d. i) The Management has represented that, to the best of it’s knowledge and
belief, as disclosed in the notes forming part of standalone financial statements, no
funds (which are material either individually or in the aggregate) have been advanced or
loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other persons or entities, including foreign
entities ("Intermediaries"), with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
ii) The Management has represented, that, to the best of it’s knowledge and
belief, as disclosed in the notes forming part of standalone financial statements, no
funds (which are material either individually or in the aggregate) have been received by
the Company from any persons or entities, including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company shall, directly or indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
iii) Based on the audit procedures that has been considered reasonable and appropriate
in the circumstances, nothing has come to our notice that has caused us to believe that
the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and
(ii) above, contain any material misstatement.
e. The Company has not declared or paid any dividend during the year and has not
proposed final dividend for the year.
| Place: New Delhi |
For SUNIL K. GUPTA & ASSOCIATES |
| Dated: 28.05.2022 |
Chartered Accountants |
|
Firm Registration No.002154N |
|
(CA MAHESH CHANDRA AGARWAL) |
|
Partner |
|
M.No. 088025 |
|
UDIN: 22088025AJ UFML6809 |
ANNEXURE - A TO THE AU DITORS REPORT
[Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements
of our Report of even date
to the members of
PMC Fincorp Limited on the accounts of the company for the year ended 31 st March,
2022]
On the basis of such checks as we considered appropriate and according to the
information and Explanations given to us during the course of our audit, we report that:
(i) In respect of the Companys Property, Plant and Equipment and Intangible Assets:
(a) (A) The Company has maintained proper records showing full particulars, including
quantitative details and situation of the Property, plant and equipment.
(B) The Company has maintained proper records showing full particulars of intangible
assets.
(b) As explained to us, Property, plant and equipment have been physically verified by
the management during the year in accordance with the phased programme of verification
adopted by the management which, in our opinion, provides for physical verification of all
the Property, plant and equipment. at reasonable intervals. According to the information
and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the company has no owned
property.
(d) The Company has not revalued any of its Property, Plant and Equipment and
intangible assets during the year.
(e) No proceedings have been initiated during the year or are pending against the
Company as at March 31, 2022 for holding any Benami property under the Benami Transactions
(Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.
(ii) In respect of its inventory:
a) The inventories have been physically verified during the year by the management. In
our opinion, the frequency of verification is reasonable.
b) In our opinion and according to the information and explanations given to us, 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 has maintained proper records of inventories. As per the information and
explanation given to us, no material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not made any investments,
provided guarantee or security or granted any loans or advances in the nature of loans,
secured or unsecured, to companies, firms, limited liability partnerships or any other
parties during the year. Accordingly, this clause is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the
company has complied with section 185 and 186 of the Companies Act 2013 in respect of
loans, investments, guarantees and security.
(v) The Company has not accepted any deposit or amounts which are deemed to be
deposits. Hence, this clause of the Order is not applicable.
(vi) As informed to us, the Central Government has not prescribed maintenance of cost
records under subsection (1) of Section 148 of the Act, in respect of the activities
carried on by the Company.
(vii) In respect of statutory dues:
(a) In our opinion, the Company has generally been regular in depositing undisputed
statutory dues, including Goods and Services Tax, Provident Fund, Employees State
Insurance, Income Tax, Sales Tax, Service Tax, duty of Custom, duty of Excise, Value Added
Tax, Cess and other statutory dues applicable to it with the appropriate authorities.
There were no undisputed amounts payable in respect of Goods and Service Tax, Provident
Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, duty of Custom, duty
of Excise, Value Added Tax, Cess and other statutory dues in arrears as at March 31,2022
for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there were following
disputed amounts payable:
| Status |
Period |
Description |
Amount (Net Dues) |
Forum where dispute is pending |
| Income Tax Act 1961 |
AY 2013-14 |
Order U/s 143(3) |
10,659,306/- |
The Company has filed appeal before the Commissioner of Income Tax
(Appeals), Kanpur |
| Income Tax Act 1961 |
AY 2014-15 |
Order U/s 143(3) |
6,734,458/- |
|
| Income Tax Act 1961 |
AY 2015-16 |
Order U/s 143(3) |
15,195,181/- |
|
| Income Tax Act 1961 |
AY 2016-17 |
Order U/s 143(3) |
45,970,190/- |
|
| Income Tax Act 1961 |
AY 2017-18 |
Order U/s 143(3) |
40,791,893/- |
|
| Income Tax Act 1961 |
AY 2018-19 |
Order U/s 143(3) |
123,751,849/- |
|
| Income Tax Act 1961 |
AY 2019-20 |
Order U/s 143(3) |
23,612,609/- |
|
(viii) There were no transactions relating to previously unrecorded income that have
been surrendered or disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of
1961).
(ix) (a) According to the information and explanations given to us and on the basis of
our examination of the
records of the Company, the Company has not defaulted in repayment of loans and
borrowing or in the payment of interest thereon to banks or financial institutions or any
other lender during the year.
(b) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the Company has not been declared a wilful
defaulter by any bank or financial institution or other lender.
(c) In our opinion and according to the information and explanations given to us by the
management, no term loans were obtained during the year. Accordingly, this clause is not
applicable.
(d) The Company has not raised funds on short term basis during the year and hence,
reporting under clause (ix)(d) of the Order is not applicable.
(e) The Company does not hold any investment in any subsidiary, associate or joint
venture (as defined under Companies Act, 2013) during the year ended 31 March 2022.
Accordingly, this clause is not applicable.
(f) According to the information and explanations given to us and procedures performed
by us, we report that the company has not raised loans during the year on the pledge of
securities held in its subsidiaries, joint ventures or associate companies.
(x) a) According to the information and explanations given to us and based on our
examination of the records
of the company, the Company has not raised moneys by way of initial public offer or
further public offer (including debt instruments) during the year and hence reporting
under this clause is not applicable.
b) According to the information and explanations given to us and on an overall
examination of the Balance Sheet, during the year Company has allotted 7,00,00,000
Convertible Warrants to Promoter and Non Promoter Category on March 16, 2022 at the rate
?9.90/- each.
(xi) (a) No fraud by the Company and no material fraud on the Company has been noticed
or reported during the year.
(b) No report under sub-section (12) of section 143 of the Companies Act has been filed
in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014
with the Central Government, during the year and up to the date of this report.
(c) According to the information and explanations given to us, during the year there
are no whistle blower complaints received by the company during the year.
(xii) The Company is not a Nidhi Company and hence this clause is not applicable.
(xiii) In our opinion, and according to the information and the explanation given to
us, all transactions with the related parties are in accordance with section 177 and 188
of the Companies Act, 2013, and the details of the same has been disclosed in the
financial statements as required by the accounting standards.
(xiv) (a) In our opinion the Company has an adequate internal audit system commensurate
with the size and
nature of its business.
(b) We have considered the internal audit reports for the year under audit, issued to
the Company during the year and till date, in determining the nature, timing and extent of
our audit procedures.
(xv) In our opinion during the year the Company has not entered into any non-cash
transactions with its Directors or persons connected with its directors and hence
provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.
(xvi) According to the information and explanations given to us, we report that the
Company has registered as required, under Section 45-IA of the Reserve Bank of India Act,
1934.
(xvii) In our opinion, there is no cash loss in the financial year and in the
immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors during the year.
Accordingly, this clause of the Order is not applicable
(xix) On the basis of the financial ratios, ageing and expected dates of realization of
financial assets and payment of financial liabilities, other information accompanying the
financial statements and our knowledge of the Board of directors and Management plans and
based on our examination of the evidence supporting the assumptions, nothing has come to
our attention, which causes us to believe that any material uncertainty exists as on the
date of the audit report indicating that Company is not capable of meeting its liabilities
existing at the date of balance sheet as and when they fall due within a period of one
year from the balance sheet date. We, however, state that this is not an assurance as to
the future viability of the Company. We further state that our reporting is based on the
facts up to the date of the audit report and we neither give any guarantee nor any
assurance that all liabilities falling due within a period of one year from the balance
sheet date, will get discharged by the Company as and when they fall due.
(xx) In our opinion and according to the information and explanations given to us,
section 135 of the Companies Act, 2013 is not applicable to the company. Accordingly, this
clause is not applicable.
ANNEXURE - B TO THE AUDITORS REPORT
Report on the Internal Financial Controls under Clause
(i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of PMC
Fincorp Limited ("the Company") as of 31st March 2022 in conjunction with
our audit of the standalone financial statements of the Company for the year ended on that
date.
Managements Responsibility for Internal Financial Controls
The Companys 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 (ICAI). 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 companys 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.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys 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 "Guidance Note") 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 auditors 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 Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys 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 companys 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 companys 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 31st March, 2022, 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.
| Place: New Delhi |
For SUNIL K. GUPTA & ASSOCIATES |
| Dated: 28.05.2022 |
Chartered Accountants |
|
Firm Registration No.002154N |
|
(CA MAHESH CHANDRA AGARWAL) |
|
Partner |
|
M.No. 088025 |
|
UDIN: 22088025AJ UFML6809 |
+91-9892691696
