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 31st March2018 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ( the Act ) with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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 accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on the auditors judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company s preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company s directors as well as evaluating the overall presentationof 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 31st March 2018 and its profit and its cash flows for the year ended onthat date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order 2017 ( Order ) issued by theCentral Government of India in terms of sub-section (11) of Section 143 of the Act weenclose 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 ouropinion proper books of account as required by law have been kept by the Company so faras appears from our examination of those books; c) The Balance Sheet the Statement ofProfit and Loss and the Cash Flow Statement dealt with by this report are in agreementwith the books of account; d) In our opinion the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014; e) On the basis of writtenrepresentations received from the directors as at 31st March 2018 and taken onrecord by the Board of Directors none of the directors is disqualified as on 31stMarch 2018 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 reportingof the Company and the operating effectiveness of such controls refer to our separateReport in "Annexure B"; and g) With respect to the other matters to beincluded in the Auditor s Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 read with Companies (Audit and Auditors) Rules 2017 in our opinionand to the best of our information and according to the explanations given to us:
(i) The Company does not have any pending litigations which would impact its financialposition;
(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 amountswhich were required to be transferred to the Investor Education and Protection Fund by theCompany.
(iv) The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period 8 November 2016 to30 December 2016. Based on the audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the management.
FOR ROHIT SURI & ASSOCIATES
CHARTERED ACCOUNTANTS FRN : 012259N
ROHIT SURI PROPRIETOR M.NO.091064
PLACE: NEW DELHI
Annexure A to the Independent Auditors' Report
(Referred to in our report of even date)
i. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. The Company has a regular programme ofphysical verification of its fixed assets by which all fixed assets are verified annually.In our opinion the periodicity of physical verification is reasonable having regard tothe size of the Company and the nature of its assets. No material discrepancies werenoticed on such verification. According to the information and explanations given to usno immovable property is owned by the Company. Hence the provisions of paragraph (i)(c)of the Order is 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 noticed 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 Section 73 to 76 or any other relevant provisions ofthe Act and the rules framed thereunder.
vi. The Central Government has not prescribed the maintenance of cost records undersub-section (1) of Section 148 of the Act for any of the services rendered by the Company.Hence the provisions of paragraph 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-taxSales-tax Cess Duty of Excise and Duty of Customs. According to the information andexplanations given to us no undisputed amounts payable in respect of Income-taxProvident Fund Service tax and other material statutory dues were in arrears as at 31March 2018 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 are no dues onaccount of Income-tax Provident and Service tax which have not been deposited with theappropriate authorities on account of dispute as at 2018.
viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to any banks and financial institutions.The Company did not have any outstanding dues to debenture holders during the year.
ix. According to the information and explanations given to us and our examination ofthe records of the Company term loans have been obtained by the Company during the yearand the same was utilized for the purpose it was taken. The Company has not raised anymoney by way of initial public offer or further 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 relatedparties which are not in compliance with Section 177 and 188 of the Act and the detailshave been disclosed in the financial statements as required by the applicable accountingstandards.
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 is notapplicable.
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
FRN : 012259N
Sd/- ROHIT SURI PROPRIETOR M.NO.091064
PLACE: NEW DELHI
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF PANAFIC INDUSTRIALS LIMITED
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 PanaficIndustrials Limited ("the Company") as of 31 March 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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 Reporting (theGuidance Note ) issued bythe 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 Act.
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 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 the ICAI. Those Standards and the Guidance Note require thatwe comply 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 auditor s 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 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 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 31 March 2018 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
CHARTERED ACCOUNTANTS FRN : 012259N
ROHIT SURI PROPRIETOR M.NO.091064
PLACE: NEW DELHI