To the Members of Panafic Industrials Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Panafic IndustrialsLimited (the Company) which comprise the Balance Sheet as at 31 March 2016and the Statement of Profit and Loss and Cash Flow Statement for the year then ended anda summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of internal financialcontrol that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Companys Directors as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2016; and its Profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("Order") issuedby the Central Government of India in terms of sub-section (11) of Section 143 of the Actwe enclose in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the said 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 bestof 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 theCompany as appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this report are in agreement with the books of account;
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
e) On the basis of written representations received from the directors as at 31 March2016 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31 March 2016 from being appointed as a director in terms of Section 164(2) of theAct;
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and
g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements;
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses; and
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For ROHIT SURI & ASSOCIATES
PLACE: NEW DELHI
Annexure A to the Independent Auditors Report (Referred to in our report ofeven date)
i. There are no Fixed Assets in the company. Hence the provisions of paragraph (i)(a) (b) and (c) of the order are not applicable.
ii. As informed to us the inventory which is in the nature of securities has beenphysically verified by the management during the year either by actual inspection or onthe basis of statement received from depository participants in respect of shares held asinventory. In our opinion the frequency of such verification is reasonable. No materialdiscrepancies have been notice on physical verification of inventory.
iii. The Company has not granted any loans secured or unsecured to Companies or otherparties covered in the register maintained under section 189 of the Act. According to theinformation and explanations given to us we are of the opinion that there are no firms orlimited liability partnerships covered in the register maintained under Section 189 of theAct.
iv. According to the information and explanations given to us in respect of loansinvestments guarantees and securities the Company has complied with the provisions ofSection 185 and 186 of the Act to the extent applicable.
v. According to the information and explanations given to us the company has notaccepted any deposits from the public as mentioned in the directives issued by the ReserveBank of India and the provisions of sections 73 to 76 or any other relevant provisions ofthe Act and the rules framed there under.
vi. The Central Government has not prescribed the maintenance of cost records under subsection (1) of section 148 of the
Act for any of the services rendered by the company. Hence the provisions ofparagraph 3(vi) of the Order is not applicable.
vii. (a) According to the information and explanations given to us and on the basis ofour examination of records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees StateInsurance Income-tax Service tax and other material statutory dues have generally beenregularly deposited during the year by the company with the appropriate authorities. Asexplained to us the Company did not have any dues on account of Value added-tax Salestax Cess Duty of Excise and Duty of Customs.
According to the information and explanations given to us no undisputed amountspayable in respect of Income tax Provident Fund Service tax and other material statutorydues were in arrears as at 31 March 2016 for a period of more than six months from thedate they become payable.
(b) According to the information and explanations provided to us there are no dues onaccount of Income-tax Provident Fund and Service tax which have not been deposited withthe appropriate authorities on account of disputes as at 31 March 2016.
viii. In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to any banks and financialinstitutions. The Company did not have any outstanding dues to debenture holders duringthe year. ix. According to the information and explanations given to us and ourexamination of the records of the Company no term loans have been obtained by the Companyduring the year. The Company has not raised any money by way of initial public offer orfurther public offer (including debt instruments).
x. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
xi. According to the information and explanations given to us the managerialremuneration has been paid or provided in accordance with the requisite approvals mandatedby the provisions of Section 197 read with Schedule V to the Act.
xii. According to the information and explanations given to us the Company is not aNidhi Company. Hence the provisions of paragraph 3(xii) of the Order are not applicable.
xiii. According to the information and explanations given to us and on the basis ofour examination of the records of the
Company there are no transactions with the related parties which are not in compliancewith Section 177 and 188 of the Act and the details have been disclosed in the financialstatements as required by the applicable accounting standards.
xiv. According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under audit.
xv. According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3 (xv) of the Order arenot applicable.
xvi. The Company is already registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. The copy of such registration has been obtained.
For ROHIT SURI & ASSOCIATES
PLACE: NEW DELHI
Annexure B to the Independent Auditors Report
(Referred to in our report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act
We have audited the internal financial controls over financial reporting of PanaficIndustrials Limited ("the Company") as of 31 March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (theGuidance Note) issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompanys policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of internal financialcontrols and both issued by ICAI. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompanys 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 control over financialreporting including the posiibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial control over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For ROHIT SURI & ASSOCIATES
PLACE: NEW DELHI