To the Members of
Proaim Enterprises Limited
(Formerly known as Shree Nath Commercial & Finance Limited)
Report on the Financial Statements
We have audited the accompanying financial statements of Proaim Enterprises Limited(Formerly known as Shree Nath Commercial & Finance Limited) ("theCompany") which comprise the balance sheet as at 31 March 2016 the statement ofprofit and loss and the cash flow statement for the year ended on that date and asummary of significant accounting policies and other explanatory information.
Managements Responsibility for the 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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting 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 maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. 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 andthe disclosures 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 but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Companys Directors aswell as evaluating the overall presentation 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 financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2016 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure a statement on the matters specified inthe paragraph 3 and 4 of the Order to the extent applicable.
2. 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 so far as it 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 financial statements comply with the AccountingStandards 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 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act.
(f) with respect to adequacy of internal financial control over financial reporting ofthe company and the operating effectiveness of such controls refer to our separate reportin "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 - Refer Note no. 23 to the financial statements;
ii. the Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. The company is not liable to transfer any amounts to the Investor Education andProtection Fund. Therefore there has been no delay in transferring amounts required tobe transferred to the Investor Education and Protection Fund by the Company.
|For Pravin Chandak & Associates Chartered Accountants ||Sd/- |
|Firms registration number: 116627W ||Pravin Chandak |
|Place: Mumbai ||(Partner) |
|Date: 28/05/2016 ||Membership Number: 049391 |
Annexure A to the Independent Auditors' Report -31st March 2016
The Annexure referred to in our Independent Auditors Report to the members of theCompany on the financial statements for the year ended 31 March 2016 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has a regular programme of physical verification of fixed assets. Nomaterial discrepancies were noticed during physical verification.
(c) The company does not have any immovable property hence the clause is notapplicable.
(ii) As informed to us the equity shares held as inventories in dematerialized formhave been verified by the management with supportive evidence during the year. And forother unquoted equity shares held as inventories the procedures performed by themanagement for physical verification were found to be satisfactory. No materialdiscrepancy was found.
(iii) (a) The Company has granted loans to one party covered in the register maintainedunder section 189 of the Companies Act 2013 ('the Act).
(b) In the case of the loans granted to any parties in the register maintained undersection 189 of the Act the borrowers have been regular in the payment of the interest asstipulated. The terms of arrangements do not stipulate any repayment schedule and theloans are repayable on demand. Accordingly paragraph 3 (ii) (b) of the order is notapplicable to the Company in respect of repayment of the principal amount.
(c) There are no overdue amounts for period of more than ninety days in respect of theloans granted to the bodies corporate listed in the register maintained under section 189of the Act.
(iv) The company has complied with the provisions of section 185 and 186 of theCompanies Act 2013.
(v) During the year Company has not accepted any deposits from the public hence theclause is not applicable.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of employees state insurance and duty of excise.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax service tax duty of customsvalue added tax were in arrears as at 31 March 2016 for a period of more than six monthsfrom the date they became payable. However subject to pay dues under Professional Tax butno amount was deposited till the reporting date.
(viii) The Company did not have any outstanding dues to financial institutions banksor debenture holders during the year.
(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer during the year. The company has not taken any term loans during the year.
(x) According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the course of our audit.
(xi) The company has paid managerial remuneration in accordance with provisions of thesection 197 read with Schedule V of the Companies Act.
(xii) The company is not a Nidhi Company hence the clause is not applicable.
(xiii) All the transactions with the related parties are in compliance with sections177 and 188 of Companies Act 2013 and the necessary details have been disclosed in theFinancial Statements etc as required by the applicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year
(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him.
(xvi) The financial assets of the company constitute more than 50% of the total assetsof the company. Since the company is also engaged in trading activity the income fromwhich is approximately more than 50% of the gross income of the company. Hence thecompany does not fulfills one of the NBFC criterion prescribed in terms of section 45-IAof the RBI Act 1934 in the current financial year and therefore NBFC provisions are notapplicable in the current financial year.
For Pravin Chandak & Associates
Firms registration number: 116627W
Membership number: 049391
Date: 28th May 2016
Annexure- B to the Independent Auditors' Report -31st March 2016
Report on the Internal Financial Controls under Clause (i) of sub- section 3 of theSection 143 of the Companies Act 2013 ('the Act)
We have audited the internal financial controls over financial reporting of M/sPROAIM ENTERPRISES LIMITED (Formerly known as SHREE NATH COMMERCIAL & FINANCE LIMITED)(thecompany) as of 31st March 2016 in conjunction with our audit of the financialstatements of the company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The company's 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 Reportingissued by the Institute of Chartered Accountant of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 on Audit of Internal Financial Controls over Financial Reporting(the 'Guidance Note) and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act2013 to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.
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. Theprocedures selected depend on the auditors judgment including the assessment of therisks 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 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 authorization ofthe Management and directors of the Company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition use or dispositionof the Companys assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility 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 controls 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.
According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified as at March 31 2016.
a) The Company did not have an appropriate internal control system for granting Loans.Demand and other loans given are governed by the Board policies. Considering the closemonitoring of Board no appraisal renewal Policies Procedure Committee or documentshave been prescribed and executed.
b) The Company's internal control system is not commensurate to the size and scale ofoperation over purchase and sale of trading division.
A 'material weaknesses is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.
In our opinion except for the effects / possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria the Companyhas maintained in all material respects adequate internal financial controls overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as of March 31 2016 based on the internal control over financialreporting criteria established by the company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Chartered Accountants of India.
We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2016financial statements of the Company and the material weaknesses does not affect ouropinion on the financial statements of the Company.
FOR PRAVIN CHANDAK & ASSOCIATES
Membership Number: 049391
Firms Registration Number: 116627W
Date: 28th May 2016