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Paragon Finance Ltd.

BSE: 531255 Sector: Financials
NSE: N.A. ISIN Code: INE015E01012
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NSE 05:30 | 01 Jan Paragon Finance Ltd
OPEN 17.00
PREVIOUS CLOSE 17.00
VOLUME 500
52-Week high 17.46
52-Week low 8.76
P/E 4.58
Mkt Cap.(Rs cr) 7
Buy Price 17.00
Buy Qty 466.00
Sell Price 17.00
Sell Qty 688.00
OPEN 17.00
CLOSE 17.00
VOLUME 500
52-Week high 17.46
52-Week low 8.76
P/E 4.58
Mkt Cap.(Rs cr) 7
Buy Price 17.00
Buy Qty 466.00
Sell Price 17.00
Sell Qty 688.00

Paragon Finance Ltd. (PARAGONFINANCE) - Auditors Report

Company auditors report

To The Members of

PARAGON FINANCE LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Paragon Finance Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

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 theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India:

1. In the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2019

2. In the case of the Profit and Loss Account of the PROFIT for the year endedon that date; and

3. In the case of Cash Flow Statement of the cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Auditof the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. There matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to communicate in our report.

Information other than the Financial Statement and Auditor's Report thereon

The Company's Board of Directors are responsible for the other information. The otherinformation comprises the information included in the Company's annual report but doesnot include the financial statements and our auditors' report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under Section 133 of the Act read with Rule7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatementwhether due to fraud or error.

In preparing the standalone financial statement 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 to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibility

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable Assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with theSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of the users taken on thebasis of these standalone financial statements.

As a part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and to obtain audit evidence that is sufficient and appropriate to providea basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained upto the date of our auditor'sreport. However future events or conditions may cause the company to cease to continue asa going concern.

• Evaluate the overall presentations structure and content of the standalonefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosures about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act [hereinafterreferred to as the Order] we give in the Annexure ‘A'a statement on the mattersspecified in paragraphs 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 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 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st 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 control over financialreporting of the company and the operating effectiveness of such control refer to ourseparate report in Annexure ‘B'.

(g) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provision of Section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance withRule 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 litigation and its impact onfinancial position in the financial statement as referred to in Note No. 1.B.8 of theFinancial Statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection fund by the Company.

For AGARWAL MAHESWARI & CO.
Chartered Accountants
Place: Kolkata Firm Reg. No. : 314030E
Dated: The 29th day of May 2019 [CA. APURVA MAHESWARI]
Partner
Membership No. 304538

ANNEXURE – A TO AUDITORS' REPORT

The Annexure referred to in paragraph 1 of Our Report of even date to the members ofParagon Finance Limited on the accounts of the company for the year ended March 31 2019.

1) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

b) All the assets have not been physically verified by the management during the yearbut there is a regular program of verification which in our opinion is reasonable havingregard to the size of company and the nature of its assets. No materials discrepancieswere noticed on such verification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the Title Deeds of Immovable properties areheld in the name of the Company.

2) According to the information and explanations given to us The Company does not haveany Inventory. Therefore the provisions of Clause (ii) of paragraph 3 of the CARO 2016are not applicable to the Company.

3) In respect of the loans secured or unsecured granted by the Company to CompaniesFirms Limited Liability Partnership or other parties covered in the register maintainedpursuant to provision of section 189 of the Companies Act 2013-

a) The Terms and Conditions of the loans granted are not prejudicial to the interest ofthe Company.

b) In our opinion and according to the information and explanations given to us thereceipt of the Principal amount and interest are regular.

c) In respect of the said loans and interest thereon there are no overdue amounts.

4) In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act2013 in respect of Loans Investments Guarantees and Security.

5) According to the information and explanations given to us the Company has notaccepted any deposit from the public and hence the directives issued by the Reserve Bankof India and the provisions of section 73 74 75 & 76 of the Act and the Companies(Acceptance of Deposit) Rules 2015 with regard to the deposits accepted from the publicare not applicable. Therefore Clause 3(v) of the CARO 2016 are not applicable to theCompany.

6) The Central Government of India has not prescribed the maintenance of cost recordsunder sub section (1) of section 148 of the Companies Act 2013 for any of the products ofthe company.

7) a) The company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax salestax wealth tax service tax duty of custom duty of excise value added tax cess andother material statutory dues applicable to it. According to the information andexplanations given to us no undisputed amounts payable in respects of the aforesaid dueswere outstanding as at 31st March 2019 for a period of more than six months from thedate they became payable.

b) Details of dues of Income Tax Sales Tax duty of Custom Wealth Tax Service Taxduty of Excise Value Added Tax and Cess which have not been deposited as on 31st March2019 on account of dispute are given below :

Sl. No. Name of Statute Nature of Dues Amount in Rs. Period Forum where dispute is pending
1. Finance Act 1994 Service Tax 2681414/- A. Y. 2003-08 Commissioner of Service Tax – Kolkata
2. Income Tax Act 1961 Income Tax 1256340/- A.Y. 2013-14 CIT (Appeal) – 21 / Kolkata
3. Income Tax Act 1961 Income Tax 615010/- A.Y. 2014-15 CIT (Appeal) – 21 / Kolkata

8) According to the records of the company examined by us and the information andexplanations given to us we are of the opinion that the company has not defaulted inrepayment of dues to financial institutions banks and debenture holders.

9) The company has not raised any money by way of initial public offer or furtherpublic offer and Term Loan have been applied for the purposes for which they were raised.

10) In our opinion and according to the information and explanation given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the year.

11) According to the information and explanation given to us and based on ourexamination of the records of the Company the Managerial Remuneration paid by the Companyhas been paid or provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Companies Act.

12) The Company is not a Nidhi Company. Therefore the provisions of clause 3(xii) ofthe Order are not applicable to the Company.

13) According to the information and explanations given to us and based on ourexamination of records of the Company transactions with the related parties are incompliance with Section 177 and 188 of companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements as required by the applicableaccounting standards.

14) According to the information and explanations given to us by the management thecompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year under review. Accordingly the provisions ofClause 3(xiv) of the Order are not applicable to the Company.

15) According to the audit procedure performed and the information and explanationsgiven to us by the management the company has not entered into any non-cash transactionswith directors or persons connected with him. Accordingly the provisions of Clause 3(xv)of the order are not applicable to the Company.

16) According to the audit procedures performed and the information and explanationgiven to us by the management the company is registered under Section 45-IA of theReserve Bank of India Act 1934.

For AGARWAL MAHESWARI & CO.
Chartered Accountants
Place: Kolkata Firm Reg. No. : 314030E
Dated: The 29th day of May 2019 [CA. APURVA MAHESWARI]
Partner
Membership No. 304538

ANNEXURE – B TO AUDITORS' REPORT

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 ParagonFinance Limited ("the Company") as of 31st March 2019 in conjunctionwith our audit of financial statements 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 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.

Auditors' Responsibility

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 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.

Opinion

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 31st March 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 AGARWAL MAHESWARI & CO.
Chartered Accountants
Place: Kolkata Firm Reg. No. : 314030E
Dated: The 29th day of May 2019 [CA. APURVA MAHESWARI]
Partner
Membership No. 304538