Independent Auditor's Report
The Members of
Paramount Cosmetics (India) Limited Bangalore.
Report on the Ind AS Financial Statements:
We have audited the accompanying Ind AS financial statements of Paramount Cosmetics(India) Limited (the
"Company") which comprise the Balance Sheet as at 31st March 2018 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and Cash Flow Statement for the year then ended and a summary of thesignificant accounting policies and other explanatory information.
Management's Responsibility for the Ind AS 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 preparationof these Ind AS financial statements that give a true and fair view of the state ofaffairs (financial position) profit or loss (financial performance including othercomprehensive income) and changes in equity of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified in The Companies (Indian Accounting Standards) Rules 2015 asamended under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements 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 ofaccounting records relevant to the preparation and presentation of the Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 there under.
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act except SA 501 that wecould not participate in physical verification of inventories at the year end since ourappointment was made subsequent to the year end. Those Standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the Ind AS 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 theauditor's judgment including the assessment of the risks of material .misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Management as well as evaluating theoverall 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 IndAS 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 including the Ind AS of the state ofaffairs (financial position) of the Company as at 31st March 2018 and its TotalComprehensive Income (comprising of Loss and Other Comprehensive Income) its cash flowand the changes in equity for the year ended on that date.
Emphasis of Matter:
We draw your attention to disclosure in 31.15 of the Financial Statements regardingfirst time implementation of Ind AS due to which adjustments have been made by restatingIndian GAAP financial statements including the Balance Sheet as at 01.04.2016 and theFinancial Statements for the year ended 31.03.2017 which has resulted in decrease inequity as presented under previous GAAP by Rs 262.42 Lacs on 31.03.2017. Our opinion isnot modified in respect of the above matters.
Report on Other Legal and Regulatory Requirements:
I. As required by the Companies (Auditor'S Report) Order 2016 ("the Order")issued by the Central
Government in terms of Section 143(11) of the Act and on the basis of such checks ofthe books and records of the company as we considered appropriate and according to theinformation and explanations given to us we give a statement on the matters specified inparagraphs 3 and 4 of the Order. i. a. The Company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets;
b. The Company has a program of verification of fixed assets to cover once in afinancial year. However no material discrepancies found on such physical verification.
c. The title deeds of immovable properties are held in the name of the company.
ii. The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material and thesame have been properly dealt with in the books of accounts.
iii. The company has not granted any loans secured or unsecured to companies firmsLimited
Liability Partnership Firms or other parties covered in the register maintained u/s 189of the Act hence the question of grant of such loans being prejudicial to company'sinterest schedule of repayment of interest and principal receipt of principal andinterest on regular basis and steps for recovery of overdue amount for more than 90 daysas per clause (iii) of the Order does not arise.
iv. The company has complied with the provisions of Sections 185 and 186 of the Act inrespect of investments made during the year. The company has not granted any loans norgiven guarantees / security hence the question of compliance with the provisions ofSections 185 and 186 of the Act does not arise.
v. The company has not accepted any deposits from public; hence the question ofcompliance with the directives issued by the Reserve Bank of India and the provisions ofSections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder as per clause (v) of the Order does not arise.
vi. The company is not required to maintain cost records under sub-section (1) ofsection 148 of the
Act for the operations of the company; hence the reporting requirements under clause(vi) of the Order does not arise. vii. a. The company is not regular in depositingundisputed statutory dues including Provident Fund
Employees State Insurance Income tax Sales Tax Service tax Goods and Services TaxDuty of Customs duty of Excise Value Added Tax Cess and other statutory dues with theappropriate authorities to the extent applicable to it.
b. Subject to the following dues we state that no undisputed amounts payable in respectof Provident Fund Employees State Insurance Income Tax Sales Tax Service Tax Goodsand Services Tax Duty of Customs Duty of Excise Value Added Tax Cess and otherstatutory dues which have remained outstanding as at 31st March 2018 for a period of morethan six months from the date they became payable.
|Name of the Statue ||Nature of Dues ||Amount(Rs in Lakhs) ||Period to which the amount relates ||Due Date |
|The Provident fund and Miscellaneous provisions Act 1952 ||Provident fund dues ||2.46 ||April- August 2017 ||15th of Every subsequent month |
|The Employees State Insurance Act 1948 ||ESI dues ||0.17 ||April- August 2017 ||15th of Every subsequent month |
|The tax on profession and callings ||Profession Tax ||0.38 ||April 2016 to August 2016 ||20th of Every subsequent month |
|The Finance Act 1994 ||Service tax undue reverse charge mechanism ||4.15 ||2015-16 up to August 2017 ||5th of Every subsequent month |
|State VAT Acts ||VAT payable ||0.24 ||2016-17 up to August 2017 ||20th of Every subsequent month |
|Central State and Integrated Goods and Services Tax ||GST ||0.06 ||April - August 2017 ||20th of Every subsequent month |
c. According to the information and explanations given to us there are no dues ofIncome tax or Sales Tax or Service Tax or Duty of Customs or Duty of Excise or value AddedTax which have not been deposited on account of any dispute except as stated below:
|Name of the Statute ||Nature of the Dues ||Amount (Rs in lacs) ||Period to which the amount relates ||Forum where dispute is pending |
|West Bengal Sale Tax Department ||Sales Tax Dues ||20.12(Net of payments under protest) ||2001-02 2002-03 ||Joint Commissioner of commercial tax WB |
viii. The Company has not defaulted in repayment of loans or borrowings from banks andFinancial
Institutions. The company has neither borrowed any loans from Government nor issued anydebentures and consequently the question of default in repayment does not arise.
ix. No money was raised by way of initial public offer or further public offer nor thecompany has raised money by term loan during the year hence the requirements of clause(ix) of the Order are not applicable to the Company; x. To the best of our knowledge andaccording to the information and explanations given to us no fraud by the Company or onthe Company by its officers or employees has been noticed or reported during the year.
xi. In our opinion the managerial remuneration has been paid or provided in accordancewith requisite approvals mandated by the provisions if Sec 197 read with Schedule V to theAct.
xii. The company is not a Nidhi Company. Therefore the provisions of clause (xii) ofthe order are not applicable to the Company.
xiii. In our opinion and according to the information and explanations given to us thetransactions with related parties as defined in the Act are in compliance with theprovisions of Sections 177 and 188 of the Act and the disclosure of such transactions ismade in the Financial Statements as required by applicable According Standards.
xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year hence the requirement ofcompliance with provisions of Section 42 of the Act and utilization of amounts so raisedfor the purpose for which the funds were raised as per clause (xiv) of the order does notarise.
xv. In our opinion the Company has not entered into any non-cash transactions withdirectors or persons connected with them; hence the requirement of compliance with theProvisions of Section 192 of the Act as per clause (xv) of the Order does not arise.
xvi. The Company is not required to be registered under Sections 45-IA of the ReserveBank of India
Act 1934. Therefore the provisions of clause (xvi) of the Order are not applicable tothe Company.
II. As required by Sections 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 our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c. The Balance Sheet Statements of profit and loss including other comprehensiveincome the
Cash Flow Statement and Statement of Changes in Equity referred to in this report arein arrangement with the books of accounts;
d. In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting
Standards specified under Section 133 of the Act.
e. On the basis of written representations received from the directors as on 31stMarch 2018 and taken on record by the Board of Directors none of the directors iddisqualified as on 31st March 2018 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 A".
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 opinion and to the best ofour 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 - Refer Note 31.1 to the financial statements; ii.The Company did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses;
iii. There are no dues required to be transferred to the Investor Education andProtection
Fund by the Company;
iv. The disclosure requirement as envisaged in Notification G.S.R 308(E) dated 30thMarch
2017 is not applicable to the Company for the year.
| ||For DAGLIYA & CO |
| ||Chartered Accountants |
| ||(FRN 000671S) |
|Place: Bengaluru ||P MANOHARA GUPTA |
|Date: 15.06.2018 ||Membership No.: 016444 |
ANNEXURE A - TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE Ind AS FINANCIALSTATEMENTS OF PARAMOUNT COSMETICS (INDIA) LIMITED
Report on the Internal Financial Controls with reference to financial statements underClause (i) of Subsection 3 of Section 143 of the Companies Act 2013 ("theAct").
We have audited the internal financial controls with reference to Ind AS financialstatements of PARAMOUNT COSMETICS (INDIA) LIMITED ("the Company") as of March312018 in conjunction with our audit of the Ind AS financial statements of the Companyfor 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting ("Guidance Note") issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding 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 Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing as specified undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements was established and maintained and if suchcontrols operated effectively in all material respects
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements include obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements 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 withreference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A company s internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded 'as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition; use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at March 312018 based on the internal control with reference to financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note.
| ||For DAGLIYA & CO |
| ||Chartered Accountants |
| ||(FRN 000671S) |
|Place: Bengaluru ||P MANOHARA GUPTA |
|Date: 15.06.2018 ||Membership No.: 016444 |