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Paramount Cosmetics (India) Ltd.

BSE: 507970 Sector: Consumer
NSE: N.A. ISIN Code: INE143I01013
BSE 00:00 | 28 Jul 28.80 1.35
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NSE 05:30 | 01 Jan Paramount Cosmetics (India) Ltd
OPEN 28.80
PREVIOUS CLOSE 27.45
VOLUME 2592
52-Week high 28.80
52-Week low 12.51
P/E 40.56
Mkt Cap.(Rs cr) 14
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 28.80
CLOSE 27.45
VOLUME 2592
52-Week high 28.80
52-Week low 12.51
P/E 40.56
Mkt Cap.(Rs cr) 14
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Paramount Cosmetics (India) Ltd. (PARAMOUNTCOSMET) - Auditors Report

Company auditors report

To the Members of

PARAMOUNT COSMETICS (INDIA) LIMITED

Report on the Audit of Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of PARAMOUNT COSMETICS(INDIA) LIMITED ("the Company") which comprise the Balance Sheet as at March31 2020 the Statement of Profit and Loss Statement of Cash Flow for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information.

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 March 31 2020 and its Loss ami its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matters

Please refer Note No: 8 of the audited Standalone financial results as regards themanagement's evaluation of COVID-19 pandemic impact on the future performance of thecompany.

Please refer Note 32 (h) of the Additional notes regarding inventory as at 31st March2020.

The Company has applied roll back procedures on Physical verification carried out afterthe year end to arrive at the physical status of the yearend inventory.

We have applied alternate audit procedures and have relied upon the system / proceduresapplied in arriving yearend inventory on hand by the management.

Our opinion is not modified in respect of these matters.

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 Ac") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and Cash flows of the Company in accordance with theaccounting 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 records inaccordance with the provisions of the Act for safeguarding of the assets of the Companypreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the company's financialreporting process.

Auditor's Responsibility for the Audit of the Financial Statements

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 SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

2. 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.

3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

5. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 disclosure about the matter orwhen in extremely rare circumstances wo 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 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the' Annexure A' a statement on the matters specifiedin paragraphs 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 standalone financial statements comply in materialrespect with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.

e. On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate 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 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.

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

Annexure 'A' - to the Independent Auditors Report

Referred to in our report of even date to the members of PARAMOUNT COSMETICS (INDIA)LIMITED for the year ended March 312020

(i) In respect of its fixed assets:

- The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

As explained to us fixed assets have been physically verified by the management atreasonable intervals and no material discrepancies have been noticed on such verification.

- The title deeds of immovable properties are held in the name of the company.

(ii) In respect of its inventory:

As explained to us inventories have been physically verified during the year by themanagement at reasonable intervals. No material discrepancy were noticed on physicalverification of stocks by the management as compared to book records.

(iii) In Respect of Loans given by the Company

In our opinion and according to the information and explanations given to us thecompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnership or other parties covered in the register maintained under section189 of the Companies Act 2013. Accordingly the reporting requirements under sub-clause(a) (b) and (c) of Clause (iii) of paragraph 3 of the order are not applicable.

(iv) Loan to director and investment by the company

In our opinion and according to the information and explanations given to us there areno loans investments guarantees and securities granted in respect of which provisions ofsection 1S5 and 186 of the Act are applicable and hence the reporting requirements underclause (iv) of paragraph 3 of the order are not applicable.

(v) Deposits

In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits during the period under audit. Consequently thedirectives issued by Reserve Bank of India and the provisions of sections 73 to 76 of theAct and the rules framed thereunder are not applicable.

(vi) Cost Records

According to the information and explanations provided to us and as represented by themanagement the maintenance of cost records have not been specified for the company by theCentral Govt. under sub-section (1) of section 148 of the Act read with Companies (CostRecords and Audit) Rules 2014 (as amended). Hence the. reporting requirements underclause(vi) of paragraph 3 of the order are not applicable.

(vii) Statutory Dues

a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is not regular in depositing theundisputed statutory dues including provident fund employees state insurance income taxgoods and service tax duty of customs cess professional tax and other materialstatutory dues as applicable with the appropriate authorities.

b) According to the information and explanations given to us and the records of theCompany examined by us the following undisputed amounts payable in respect of providentfund employees state insurance income tax goods and service tax duty of customs cessprofessional tax and other material statutory dues were in arrears as at March 31 2020for a period of more than six months from the date they became payable:

Name of Statute Nature of Dues Forum where amount is pending Amount unpaid (Rs. In Lakh)
Employee State Insurance Act 1948 ESIC Monthly Statutory Payment Dues Employee State Insurance Corporation 9.49
Employees Provident Fund & Miscellaneous Provisions Act 1952 EPF Monthly Statutory Payment Dues Employer Provident Fund 18.03
PT Act 1987 PT Monthly Statutory Payment Dues Professional Tax 2.20
Income Tax Act 1961 TDS Monthly Statutory Payment Dues Income Tax Dept 47.11
Income Tax Act 1961 Income Tax Payment Due Income Tax Dept 123.20

c) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax goods and service tax duty ofcustoms duty of excise which have not been deposited with the appropriate authorities onaccount of any dispute except the following:

Name of Statute Nature of Dues Forum where dispute is pending Date of Notice Amount (Rs. in Lakh)
Employee State Insurance Act 1948 Contribution and Interest Office of the Recovery Officer New Delhi 15-01-2020 2.37
Employee State Insurance Act 1948 Contribution and interest ESIC Sub Regional Office Vapi 31-10-2019 0.46
Employees Provident Fund & Miscellaneous Provisions Act 1952 Contribution and Interest Asst PF Commissioner Vapi 26-02-2020 0.14

(viii) Repayment of Loan

Based upon the audit procedures carried out by us and on the basis of information andexplanations provided by the management we are of the opinion that the company has notdefaulted in repayment of dues to banks / Financial Institutions. The company has not issuedany debentures and there are no outstanding dues to government during the year.

(ix) Utilisation of IPO and further public offer:

In our opinion and according to the information and explanations given to us thecompany has not raised any money by way of initial public offer or further public offer ortaken any term loan during the year.

(x) Reporting of Fraud:

Based on the audit procedures performed by us for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given tous by the management we report that we have neither come across any instance of fraud bythe company or on the company by its officers or employees noticed or reported during theyear nor have we been informed of any such case by the management.

(xi) Approval of managerial remuneration:

According to the information and explanations given to us the company has compliedwith the provisions of the Act with respect to approval and payment of managerialremuneration during the year.

(xii) Nidhi Company:

The company is not a Nidhi Company and hence the reporting requirements under clause(xii) of paragraph 3 of the order are not applicable.

(xiii) Related Party Transaction:

According to the information and explanations given to us all transactions enteredinto by the company with related parties are in compliance with section 177 and 188 of theAct where applicable and the details thereof have been disclosed in the financialstatements as required by the applicable accounting standards.

(xiv) Private Placement of Preferential Issues:

The company has not made airy preferential allotment or private placement of shares orfully or partly convertible debentures during the year under audit.

(xv) Non-Cash Transaction

According to the information and explanations provided to us the company has notentered into any non-cash transactions with directors or persons connected with them.

(xvi) Register under RBI Act 1934 :

In our opinion and according to the information and explanations given to us thecompany is not required to be registered under Section 45 - IA of the Reserve Bank ofIndia 1934.

Annexure 'B'

Report on Internal Financial Controls Over Financial Reporting:

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 PARAMOUNTCOSMETICS (INDIA) LIMITED ("the Company") as of March 31 2020 in conjunctionwith our audit of the 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies safeguarding of its assets prevention anddetection of frauds and errors accuracy and completeness of the accounting records andthe timely preparation of reliable financial information as required under the CompaniesAct 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the company; and

3. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 materia! respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at Assessment Year : 2020-21 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

for PARY & CO.
Chartered Accountants
Firm Reg. No. 007288C
RAKESH KUMAR JAIN
Partner
Membership No: 106109
UDIN: 20106109AAAAAE8514
Place: Surat
Date: 30-Sep-2020

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