To the Members of Pacheli Industrial Finance Limited
REPORT ON THE AUDIT OF CONSOLIDATED IND AS FINANCIAL STATEMENTS
We have audited the accompanying lnd AS financial statements of Pacheli IndustrialFinance limited ("the Holding company") and its Subsidiaries (the Holdingcompany and its subsidiaries together referred as "the Group") which comprisethe Consolidated Balance Sheet as at 31 March 2019 the Consolidated Statement of Profitand Loss (including other comprehensive income) the Consolidated Statement of Changes inEquity and the Consolidated Statement of Cash Flows for the year then ended and summaryof the significant accounting policies and other explanatory information (herein afterreferred to as "lnd AS financial statements").
MANAGEMENT'S RESPONSIBILITY FOR THE IND AS FINANCIAL STATEMENTS
The Holding company's Board of Directors is responsible for the matters stated inSection 134 (5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these lnd AS financial statements that give a true and fair view of theConsolidated state of affairs Consolidated profit/ loss and other comprehensive incomeConsolidated changes in equity and Consolidated cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards ("lnd AS") prescribed under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the lnd AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error. In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but todo so
Our responsibility is to express an opinion on these Consolidated Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the Consolidated Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143 (10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the Consolidated Ind AS financial statementsare free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Consolidated Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Consolidated Ind AS financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlsrelevant to the Company's preparation of the Consolidated Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Holdingcompany's Directors as well as evaluating the overall presentation of the ConsolidatedInd AS financialstatements.
We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Consolidated Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Consolidated Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India:
i. in the case of Consolidated Balance Sheet of the state of affairs of the Company asat 31 March 2019
ii. in the case of the Consolidated Statement of Profit and Loss (comprising of othercomprehensive income) of the profit for the year ended on that date; and
iii. in the case of the Consolidated Cash Flow Statement of the cash flows for theyear ended on that date and
iv. changes in equity for the year ended on that date.
Without qualifying the report we state that balances of Loans and Advances and Longterm borrowings are subject to confirmation and the same are relied based on ManagementRepresentation Letter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government in terms of Section 143 (11) of the Act wegive in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
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 Consolidated Balance Sheet the Consolidated Statement of Profit and Loss(including other comprehensive income) the Consolidated Statement of Changes in Equityand the Consolidated Statement of Cash Flows dealt with by this Report are in agreementwith the books of account.
d) In our opinion the aforesaid Consolidated Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B"
g) With respect to the other matters to be included in the Auditor's 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 has no material foreseeable losses on long-term contracts includingderivative contracts as required under the applicable law or accounting standards
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund (IEPF) by the Company
iv. The disclosures regarding details of specified bank notes held and transactedduring 8 November 2016 to 30 December 2016 have not been made since the requirement doesnot pertain to financialyear ended 31 March 2019.
For V S SHAH AND ASSOCIATES
F R No.: 143857W
CA Vaibhav Satish Shah
M No.: 031256
Place : Mumbai
Annexure "A" to the Independent Auditor's Report on the Consolidatedfinancial statement of Pacheli Industrial Finance Limited.
Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our Report of even date to the Ind AS financial statement of theCompany for the year ended March 31st2019 :
i) In respect of its fixed assets:
(a) The company is not having any fixed assets.
(b) According to the information and explanation given to us and on the basis ofexamination of records of the Company No immovable properties are held by the Company.
ii) In our opinion the inventories have been physically verified during the year by themanagement at reasonable intervals and as explained to us no material discrepancies werenotices on physical verification.
iii) During the year the company has granted Loans secured or Unsecured to CompaniesFirms Limited Liability Partnerships or other parties covered in the register maintainedunder Section 189 of the Act and has disclosed the same in Notes to Accounts.
iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act2013 with respect to loans and investment made.
v) According to the information and explanations given to us the Company has notaccepted any deposits from the public. Therefore the provision of Clause (v) of paragraph3 of the Order is not applicable to the Company.
vi) As informed to us the Central Government has not prescribed maintenance of costrecords under subsection (1) of Section 148 of the Act in respect of the business of thecompany.
vii) a) According to information and explanations given to us and on the basis of ourexamination of the records of the company the company has been generally regular indepositing its undisputed statutory dues such as Provident Fund Employees' StateInsurance Income tax Wealth tax Service tax and any other material statutory dueswhichever is applicable to the company with the appropriate authorities during the year.According to the information and explanation given to us no undisputed amounts payable inrespect of income tax service tax and any other material statutory dues were in arrearsas at March 31 2019 for a period of more than six months from the date they becamepayable.
b) As at 31st March 2019 the following are the particulars of dues on account ofIncome-tax Sales Tax Wealth Tax Service Tax Customs Duty Excise Duty Value Added Taxand Cess matters that have not been deposited on account of dispute:
|Name of the Statute ||Nature of the dues ||Unpaid Amount (Rs. in Lac) ||Period to which the amount relates ||Forum where pending |
|NA ||NA ||NA ||NA ||NA |
viii) According to the information and explanations given to us and based on therecords of the company examined by us the company does not have any borrowing from anyfinancial institutions or bank and does not issue any debentures as at the balance sheetdate. Accordingly clause (viii) of paragraph 3 of the Order is not applicable.
ix) The company has generally applied the amount raised by it by way of term loansdebt instruments for the purpose for which those loans were obtained other than temporarydeployment pending application of those funds. The company did not raise money by way ofinitial public offer or further public offer during the year.
x) According to the information and explanation given to us no material fraud on or bycompany has been noticed or reported during the year.
xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided managerialremuneration. Accordingly clause (xi) of paragraph 3 of the Order is not applicable.
xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly clause (xii) of paragraph 3 of the Order isnot applicable.
xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause (xv) ofparagraph 3 of the Order is not applicable.
xvi) In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
For V S SHAH AND ASSOCIATES
F R No.: 143857W
CA Vaibhav Satish Shah
M No.: 031256
Place : Mumbai
Annexure "B" To the Independent Auditor's Report of even date on theConsolidated Ind AS financial statement of Pacheli Industrial Finance Limited.
(Referred to in paragraph 2 (f) under report of on other legal and regulatoryrequirements of our report of even date.)
Report on the Internal Financial Controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of PacheliIndustrial Finance Limited ("the Company") as of March 31 2019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Holding company's management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Co2mpany considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants 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 company's policies the safeguarding ofits 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 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 Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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. The proceduresselected depend on the auditor's judgment 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 Company's internal financial controls systemover 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's 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 ov er 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 March 31 2019 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 V S SHAH AND ASSOCIATES
F R No.: 143857W
CA Vaibhav Satish Shah
M No.: 031256
Place : Mumbai