To THE MEMBERS OF
ARMS PAPER LIMITED
REPORT ON THE AUDIT OF IND AS FINANCIAL STATEMENTS
We have audited the accompanying Ind AS financial statements of ARMS PAPER LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2018 theStatement of Profit and Loss the Statement of Changes in Equity and the Cash FlowsStatement for the year then ended and a summary of significant accounting policies andother explanatory information (hereinafter referred to as "Ind AS financialstatements").
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 preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of 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 Ind AS 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 Ind AS financial statements basedon 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 andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe Ind AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompanys preparation of the Ind AS financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances.Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Companys Directors as wellas evaluating the overall presentation of the Ind AS 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 Ind AS financial statements give the information required bythe 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 31st March 2018 its loss changes in equity and cash flows for the year ended onthat 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 ofsub-section(11) of section 143 of the Companies Act 2013 we give in the "Annexure -A"astatement on the matters specified in paragraphs 3 and 4 of the Order totheextent 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 purpose of our audit. (b) In ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss the statement of changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account. (d) In our opinion the aforesaid 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 the written representations receivedfrom the directors as on 31st March 2018 taken on record by the Board of Directors noneof the directors is disqualified as on 31st March 2018 from being appointed as a directorin terms of Section 164 (2) of the Act. (f) With respect to the adequacy of the internalfinancial controls over financial reporting of the Company and the operating effectivenessof such controls refer to our separate Report in "Annexure -B" (g) With respectto the other matters to be included in the Auditors Report in accordance with Rule11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best ofour information and according to the explanations given to us: i. The Company does nothave any pending litigations which would impact its financial position;
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses; iii. There were no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.
For J. R. PUROHIT & CO.
(Firm Regn No: 111841W)
Mem No: 131959
Date: May 28 2018
ANNEXURE A TO INDEPENDENT AUDITORS REPORT
With reference to the "Annexure A" referred to in the IndependentAuditors Report to the members of the Company on the Ind AS Financial statements forthe year ended 31st March 2018 we report the following:
(Referred to in paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date.)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information;
(b) As explained to us the Company has a phased program of physical verification ofits fixed assets which in our opinion is reasonable having regard to the size of theCompany and the nature of its business. During the year the Company has physicallyverified some of the assets and no material discrepancies were noticed on suchverification.
(c) The Company does not have any immovable properties hence clause (i)(c) is notapplicable.
(ii) The inventories have been physically verified during the year by the management.In our opinion the frequency of verification is reasonable. As explained to us there wereno material discrepancies noted on physical verification of inventories as compared tobook records.
(iii)During the year the Company has not given any loans secured or unsecured to thecompanies firms LLP or other parties covered in the register maintained under section189 of the Companies Act 2013. Hence Clause (iii) (a) (b) and (c) are not applicable tothe Company.
(iv) Based on our audit procedures and on the basis of information and explanationsgiven to us by the management provisions of section 185 and 186 of the Companies Act2013 in respect of loans investments guarantees and security have been complied with.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit and hence the provisions of Section 73 to 76 or anyother relevant provisions of the Companies Act and the Companies (Acceptance of Deposits)Rules 2014 with regard to the deposits accepted are not applicable to the Company.Therefore the provisions of clause (v) of paragraph 3 of the Order are not applicable tothe company. According to the information and explanations given to us no order has beenpassed by Company Law Board or National Company Law Tribunal or Reserve Bank of India orany Court or any other Tribunal.
(vi) The Central Government has not prescribed maintenance of cost records undersection 148(1) of the Companies Act 2013 in respect of the Company.
(vii) In respect of statutory dues:
(a) According to the records of the Company the Company is generallyregular indepositing with appropriate authorities undisputed statutory dues including ProvidentFund Employees State Insurance Sales Tax Service Tax Duty of Customs Duty ofExcise Value Added Tax Cessexcept for the TDS. According to the information andexplanations given to us there are undisputed amounts payable in respect of above dueswhich were in arrears as at 31st March 2018 for a period of more than six months from thedate they became payable.
|Nature of the Statue ||Nature of Dues ||Amount ||Periods to which Amount Relates |
|Income Tax Act 1961 ||Tax Deducted at Source ||35047/- ||AY 2014-15 to AY 2017- 18 |
(b) According to the information and explanation given to us the Company does not haveany disputed Statutory dues of income tax or sales tax or wealth tax or service tax orduty of customs or duty of excise or value added tax or cess.
(viii) According to the information and explanation given to us the Company has nottaken any borrowings from the financial institution or banks or debenture holders duringthe year. Therefore clause (viii) is not applicable to the Company.
(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year under audit. According to theinformation and explanation given to us the Company has not taken any term loan duringthe year. Therefore clause (ix) is not applicable.
(x) Based on the audit procedures performed and representation obtained from managementwe report that no case of material fraud by the Company or on the Company by its officeror employee has been noticed or reported for the year under audit.
(xi) Based on our audit procedures and on the basis of information and explanationsgiven to us by the management managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.
(xii) The Company is not a Nidhi Company. Therefore; the provisions of clause (xii) ofparagraph 3 of the Order are not applicable to the Company.
(xiii) Based on our audit procedures and on the basis of information and explanationsgiven to us by the management all transactions with the related parties are in compliancewith sections 177 and 188 of Companies Act2013 wherever applicable and the details havebeen disclosed in the Financial Statements etc. as required by the applicable accountingstandards;
(xiv) Based on our audit procedures and on the basis of information and explanationsgiven to us by the management the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review. Therefore the provisions of clause (xiv) of paragraph 3 of the Order arenot applicable to the Company.
(xv) Based on our audit procedures and on the basis of information and explanationsgiven tous by the management the Company has not entered into any non-cash transactionswith Directors or persons connected with him.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For J. R. PUROHIT & CO.
(Firm Regn No: 111841W)
Mem No: 131959
Date: May 28 2018
ANNEXURE B TO INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2(f) under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date.)
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the Internal Financial Controls over financial reporting of Arms PaperLimited ("the Company") as of 31st March 2018 in conjunction withour audit of the Ind AS 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(the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's 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 reportingand the Standards on Auditing both issued by ICAI and deemed to be prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout 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 judgment including the assessment of the risks ofmaterial misstatement of the Ind AS 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 company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's 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 Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of Management and Directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the Ind ASfinancial statements.
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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31stMarch 2018 based ontheinternal 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 J. R. PUROHIT & CO.
(Firm Regn No: 111841W)
Mem No: 131959
Date: May 28 2018